This is the largest transaction by Rupert Murdoch's publishing arm since the split from the film and entertainment business Twenty-First Century Fox Inc (ASX: FOX) in June 2013.

In late afternoon trade News Corp and REA Group were down 1.2% and 0.8% respectively, while the S&P/ASX 200 Index (INDEXASX: XJO) had risen 0.7%.

So What: Through realtor.com and its mobile applications, Move displays more than 98% of all for-sale properties listed in the U.S. and has the most up-to-date and accurate for-sale listings of any online real estate company in America.

Robert Thompson, chief executive of News Corp said: "This acquisition will accelerate News Corp's digital and global expansion and contribute to the transformation of our company, making online real estate a powerful pillar of our portfolio."

Meanwhile, REA Group chief executive Tracey Fellows stated that: "We believe that our digital real estate know-how, combined with News Corp's content, distribution and marketing strengths, will be a winning combination for Move and for our shareholders."

Move's online business brings consumers and realtors together to facilitate the sale and rental of real estate. It has an exclusive, strategic relationship with the National Association of Realtors (NAR), the largest trade organisation in the United States, with more than 1 million members, and NAR has given its consent to the acquisition.

Move is focused on providing a high Return on Investment (ROI) for agents and benefits from its invaluable marketing support and high quality listings for vendors and potential purchasers.

Now What: In my opinion, the acquisition appears to be a win for News Corp, REA Group and Move, and my preference would be to buy REA Group for full exposure to the structural swing in advertising away from newspapers to the internet.

However, my only reservation is that no mention of competition was made in the press release. An overnight Bloomberg report makes it clear that Zillow Inc (NASDAQ:Z) is set to acquire rival Trulia Inc (NYSE:TRLA). This transaction would create the largest company involved in online real estate advertising. However, Move can distinguish itself from these firms by focusing on its relationship with realtors.

The post News Corp and REA Group Limited make strategic U.S. acquisition: Should you buy? appeared first on The Motley Fool Australia.

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There are many investors still smarting from not participating in the first share offer of the government-owned Commonwealth Bank of Australia (ASX: CBA) in 1991 and the CSL Limited (ASX: CSL) float in 1994. Excluding dividends, the former has appreciated 1,200%, while the latter has appreciated a staggering 3,095%. Over the same time periods the S&P/ASX 200 Index (INDEXASX: XJO) has risen 272% and 164% respectively.

Some Medibank Private facts:

Medibank Private is currently owned by the Australian government and is the largest private health insurer with a 29.5% market share. BUPA is slightly smaller with a 27% share in a highly concentrated industry where five funds have an 83% share of the market. NIB Holdings Limited (ASX: NHF) is the only other publicly listed company and ranks fourth in terms of market share. After listing in November 2007, its shares have appreciated 244%, despite the S&P/ASX 200 Index falling 17%.

NIB and financial services company AMP Limited (ASX: AMP) were mutual funds that were changing structure when they floated. This allowed policyholders to obtain free shares. However, in passing from taxpayer hands to a listed entity, there are no free shares allocated to Medibank Private customers.

What is the order of preferential share allocation after pre-registering?

1. Eligible policyholders (private customers) will receive a greater share allocation.

2. Non policyholders will receive a preferential allocation by comparison with…

3. Non policyholders who failed to pre-register.

Are there any disadvantages in pre-registering?

Pre-registering ensures that you will be notified when the prospectus is ready. It carries no obligation to proceed with purchasing the shares. However, should you choose to apply for shares you will receive a preferential allocation.

How do I pre-register?

You may pre-register anytime from today until October 15 by completing the form that may be accessed by clicking on this link.      

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That's the emotion, now it's time to hone in on the reality of the situation. First, have faith in some coping strategies. Second, do a realistic assessment of your individual circumstances. Finally, be on the lookout for opportunities.

Coping strategies:

When wrestling with emotional demons, always keep in mind the following:

By itself, weakness in the overall market is not a good reason to sell your shares.

Maintain your objectivity, because your own reaction to a market fall will determine the ultimate outcome.

Assess your individual circumstances:

1. Assess why the wider market is falling and whether this will impact materially on your particular holdings.

2. Remember that you bought your stocks for a reason. If you believe the company's prospects are still good there may be an opportunity to buy additional shares.

3. We all make mistakes. If your answers to the underlined sections of points 1 and 2 above are yes and no respectively, then it may be time to take action. Put aside the price you paid for the stock, because the sell decision should take into account the company's future prospects and fundamentals when compared to the current price.

Criteria for selecting 3 safe haven stocks:

I have taken into account both medium-to-long term prospects for these stocks as well as facts gleaned from overnight market moves.

Prior to last night's significant fall in US 10-year bond yields, they had risen strongly over the month. One analysis on Bloomberg earlier this month cited a 8.5% change in the US yield, while the Australian 10-year bond yield had a 9% change over the same period. The two have a very close correlation and effectively move in lockstep.

On the basis of falling bond yields and positive company fundamentals, the stocks I selected are as follows:

Telstra Corporation Ltd (ASX: TLS)

A strong balance sheet and sustainable dividends are vital during a market downturn. In a recent article entitled: Is Telstra Corporation Ltd's grossed-up dividend yield of 7.8% too good to be true?, I made the case for the sustainability of the dividend. Additionally, the recent buy-back is evidence of balance sheet strength. Should Telstra follow the general market down, the yield will go higher and be relatively more attractive when compared to falling 10-year bond yields.

Transurban Group (ASX: TCL)

This leading toll road operator has high barriers to entry and defensive and growing cash flows. These income streams last for decades and provide the resources to make further acquisitions and upgrades, which in turn provides increased cash generation. For more information refer to: Why Transurban Group is a stock to hold for decades.

Rio Tinto Limited (ASX: RIO)

This selection may surprise some readers. The company certainly meets the strong balance sheet test, but another reason to hold the company is the support provided by projected dividend yields for FY2014 and FY2015 of around 3.8% and 3.9% respectively. Another three reasons were cited here. Only days ago, additional confirmation was provided by broker Morgan Stanley. The rating on the stock was upgraded to overweight on the company's ability to both reinvest and return cash to shareholders.

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An overnight Bloomberg report revealed that BHP Billiton Limited (ASX: BHP) chairman Jacques Nasser wrote a letter to investors informing them that: "We have been pleased by the support for the demerger and the level of interest investors have shown in the company".

The letter appeared to result from meetings with investors that included U.K. shareholders who would have been excluded from owning the new stock under the terms of a prior announcement. However, some uncertainty prevails, as the spinoff may be a secondary London listing.

Benefits and disadvantages for shareholders?

Before contemplating potential winners and losers, let's consider what assets will be in the unnamed spinoff company.  These include:

The Australian-based Cannington silver and lead mine is the world's largest operation of its kind.

The Colombian-based nickel operation called Cerro Matoso.

Aluminum and manganese assets spread across many countries.

The Illawarra metallurgical coal business.

BHP is effectively simplifying its portfolio of assets and is intending to keep five main pillars including iron ore, copper, petroleum assets, the majority of coal projects and potash.

What is the potential for shareholders of the spinoff company?

Advantages:

Bloomberg forecast the spinoff may deliver investors a two third uplift in earnings, when it was first mooted over a month ago.

With operations at the bottom of the economic cycle, other mining houses may potentially look to takeover the company.

Takeover opportunities that were previously not favoured by the BHP board may now arise for the new company.

Disadvantages:

In taking up shares in the new entity, shareholders may be exposed to more volatile commodities, when compared to iron ore and crude oil.

Potential for shareholders in BHP Billiton?

Advantages:

Management is aiming to make the company more productive while also:

Unlocking shareholder value.

Generating stronger growth in cash flow.

Aiming for a superior return on investment.

Increasing focus on its major operations.

Disadvantages:

Assuming we are near the bottom of the economic cycle, existing BHP shareholders will not be participating in a rally inspired by base metal prices.

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The shares have since retraced the majority of those gains as the general market fell. However, there is now some additional information which may cause the shares to outperform.

A new positive catalyst for Transurban:  

Before considering another positive catalyst, let's firstly review the excellent August profit result and the ensuing bullish commentary:

Profit Result:

Transurban saw stronger toll revenues and net profit after tax up 44%. Cash flow generation exceeded expectations.

Commentary after the results:

Investment in growth ensures the capacity for a 10% growth in dividends being maintained for 5 years, according to broker Macquarie Equities. They raised the target price to $8.83.

Better cash flow per security than most yield stocks both locally and globally, declared financial services company UBS.

Last week's positive catalyst:

After the release of the profit results, several analysts were looking forward to last week's Transurban investor day to provide extra clarity on the company's recent acquisitions and road upgrades. The company didn't disappoint by providing important further details including:

Positive comments relating to the recent expansion into Brisbane. This suggests upside risks to FY2015 forecasts for Queensland Motorways. Further commentary highlighted that traffic levels may recover over the short term and management remains confident of the longer-term growth.

Synergies may allow margins to get up towards the NSW portfolio level.

The potential for the U.S. to outperform, because the 95 Express Lanes in the U.S. remains on track for an opening later this year.

In Victoria the CityLink-Tulla-widening financial close and delivery dates were confirmed, as were those dates for NorthConnex in NSW.

Why is Transurban a good investment for decades?

Toll roads benefit both from rising traffic volumes and increased tolls. Additionally, they have high barriers to entry and Transurban has defensive and growing cash flows. These income streams last for decades and provide the resources to make further acquisitions and upgrades, which in turn provides increased cash generation.

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Since September 9, the S&P/ASX 200 Index (INDEXASX: XJO) has fallen 4.96%, and since hitting a 12-month high of $5.76 in late August, shares in Telstra Corporation Ltd (ASX: TLS) have slumped 6.4% to last close at $5.39.

Some have blamed the Aussie dollar due to exchange rate losses incurred by overseas investors who may be selling. However, they don't have Australian shareholders' tax incentive of fully franked dividends. The current yield on Telstra shares is 5.47%, but when grossed up for franking (by dividing by 0.7) the yield becomes 7.8%. The central question for both existing and potential shareholders is….

Is the Telstra dividend sustainable?

Before considering the Telstra dividend, let's ponder the general warning signs for unsustainable dividends including:

•  A high yield may be deceptive because the share price of a company may fall in anticipation of a reduced dividend.
• A high dividend yield may be the result of a high payout ratio, which may indicate less is being reinvested into the business and may make the dividend unsustainable.

The case for and against a sustainable dividend for Telstra:

• Management may be intending to make a large acquisition. However, there is recent evidence of the company preserving cash by avoiding large capital expenditures, for example the recently announced strategy of co-investing alongside Asian telecommunication companies to build 4G networks.
• Uncertain future NBN cash flows as renegotiations are yet to be finalised. The recent $1 billion buy-back would suggest management is very confident of future cash flows.
• Slower-than-expected growth rates in mobile services or just a negative outlook statement for mobile growth. There is little evidence of this to date and it may be countered to some extent by increased fixed-line profitability. This would result from a slowing of the decline in fixed-lines and a reduction in churn rates.

Your investment today could potentially double in less than 10 years.

A dividend yield of only 7.2% per annum is required to double your investment in 10 years. This falls to 7.2 years if the average annual return is 10%. Some confidence may be derived from consensus grossed up dividend yield forecasts for FY2015 and FY2016 of 8.14% and 8.7% respectively.

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What: After today's very impressive full-year result for retailer Premier Investments Limited (ASX: PMV), management remains upbeat about future prospects. While the S&P/ASX 200 Index (INDEXASX: XJO) is currently trading down 0.4 %, the shares of Premier Investments have risen strongly to be 8.24% or 81 cents higher at $10.64.

Highlights of the result:

To avoid confusion, the results are shown below for the group as a whole (Premier Investments) and the retail division (Premier Retail)

Group Profit:

• Underlying net profit before tax of $106 million – up 10.3%
• Reported net profit after tax of $73 million – up from $69.3 million (after adjusting for a reclassification).
• Final fully franked dividend of 20 cps (FY2013 19cents) – full-year dividend 40 cps.

Premier Retail contribution to Premier performance:

• Underlying profit before tax of $87 million – up 13.4%
• Sales of $888.4 million – up 6.2%
• Like-for-like sales growth – up 4.7%
• Underlying EBIT of $92.8 million – up 10.9%
• Underlying EBIT margin – up 44 basis points to 10.4%

These results far outperform similar retail investments and notable comparison against the results released less than a week ago by Myer Holdings Ltd (ASX: MYR), which revealed weak revenues and a fourth year of falling profits.

So What?

The outlook commentary was extremely positive. Premier's Chairman, Mr. Solomon Lew said: "Premier will continue to deliver sustainable long-term growth for shareholders by both optimising the value of our core retail brands and by unlocking the value of our uniquely-positioned growth brands, Smiggle and Peter Alexander."

Smiggle attained total sales in excess of $100 million ($105.2) for the first time and grew sales at 17.4%. The main driver was Smiggle UK which was only launched in the UK in February 2014. It now has eight stores operating, with a further 10 to be opened before Christmas and the opportunity is seen as "substantial". Management envisages up to 200 stores over five years in the UK, with sales in excess of $200 million.

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Why is the market surprised?

While the market largely expected the new product approval, the product label appears broad and non-restrictive and does not call for the need to monitor patients for certain antibody levels. This may prove vital in uptake and patients switching away from CSL's product, according to broker Morgans.

Quantifying the risk to CSL:

According to the broking arm of Citigroup, CSL's Hizentra garners approximately $500 million in revenue per annum and is currently growing at around 19%. It represents about 20% of Ig sales and approximately 10% of group sales. If growth were to slow to zero it would have a $100 million impact, which is not large in the context of group sales. However, this would potentially concern investors as CSL's product mix is skewed to immunoglobulins and they are the incremental driver of expansion.

Summary of market concerns:

1. Baxter's product requires less frequent dosing and this benefit is very significant for patients.

2. Why wouldn't existing CSL patients trial HyQvia, as they may always switch back to Hizentra?

3. CSL is being over optimistic in suggesting that the battle is for new patients. The fear is that many may switch from CSL's products.

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Arrium Ltd (ASX: ARI) yesterday came out of a trading halt to announce the raising of a minimum $754 million. The internationally diversified mining and materials company was spun out of BHP Billiton Limited (ASX: BHP) in the year 2000.

Why this is a shock raising?

The company had continued to pay dividends from 2009 until less than a month ago. Just by avoiding these payments it could be argued that the raising would have been unnecessary.

The company has a market capitalisation of less than $900 million, so it is seeking to raise nearly its whole market value.

What you need to know about the renounceable entitlement offer:

1. There are two parts to the offer. A 15% institutional placement of $98 million and a $656 million entitlement offer for ordinary shareholders.

2. The company has been fair and equitable in allowing existing shareholders such a large portion of the raising. They may either:

Take up the rights and buy more shares.

Sell the rights on market.

Renounce them and be paid via a book build.

3. The issue has been priced at 48 cents which is a 26% discount to the 65 cents price prior to the suspension of trading.

4. The issue is fully underwritten. Thus, should the money not be raised via both the institutions and shareholders, the underwriters will ensure that Arrium will still raise the full amount of the funds.

In my opinion, after considering individual circumstances, many shareholders will be more comfortable in holding shares in a company with a net debt of around $980 million as opposed to $1.7 billion prior to the raising. However, I am positive on the outlook for iron ore, as evidenced by an article on Rio Tinto Limited (ASX: RIO) penned yesterday entitled: "Why Rio Tinto Limited has entered the buy zone."

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So why the negative share price reaction?

Leighton shares went ex-dividend, which accounted for almost two thirds of the fall. The market sell-off also likely didn't help. And, the Fairfax media has today reported that it has received a "freshly leaked batch of company files including correspondence between two top Leighton executives in 2011." They reveal allegedly improper, "rewards, special bonuses and travel rorts" in the company's overseas operations.

This new evidence will be used in an upcoming Australian Federal Police case against the company. According to Fairfax it may "provide the most damning evidence to date that some of the company's senior executives not only conspired to pay kickbacks but sought to cover them up by inflating or backdating contracts."

The leaked emails refer to serious corporate governance failures in Iraq, India and the Middle East.

What now? Companies go ex-dividend twice a year (at least those that pay dividends every six months) so that isn't a surprise. And the company can't do much about broader market sentiment. When it comes to the allegations, it should be remembered that these alleged indiscretions are still to be proven and the company is yet to make a statement, let alone have its day in court.

However, should they be proven to be factual, it does point to potentially more trouble for Leighton. Major integrity improvements were made in 2012 and most executives involved prior to that date have departed the company.

"Editor's Note: The original version of this article cited the allegations in the Fairfax press, but didn't include a reference to the company's shares going ex-dividend or the broader market fall. This should have been referenced in the original article."

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This is not a straw hats in winter story that recommends counter-cyclical buying on the dips in mere hope. Rio Tinto Limited (ASX: RIO) has fallen to levels that suggest for a number of reasons there is potentially significant upside.

Yes, I hear you say, but what about the falling iron ore price and the weakening Chinese economy? These are not mere trifles, but they are potentially already factored into the share price. Also, China has massive reserves with which to bolster growth rates should that become necessary. Let's consider below whether the positives are outweighing the negatives for arguably the world's premier iron ore company.

The Aussie dollar effect:

In recent days the currency has plummeted from a high of US$94.85 to a low of US$90.01 this morning. This represents a depreciation of over 5%. The potential effect on full-year 2014 underlying earnings of a 10 % fall in the Aussie dollar would be $515 million.

The reporting season effect:

Additionally, in my opinion, Rio was the standout during the August reporting season by convincingly beating consensus expectations. The majority of brokers subsequently lifted the target price for the stock to an average of around $80. This represents just under 30% upside from Friday's closing price of $61.89.

The dividend support effect:

The company has all but promised higher capital returns after the full-year 2014 result and is fast becoming a yield play with projected dividend yields for FY2014 and FY2015 of around 3.8% and 3.9% respectively. In the current environment this yield effect is not to be understated and should provide a base level measure of support.

Survival of the fittest effect:

Deutsche Bank's broking division has done a review of spot cash margins for iron ore. Taking into account all-in costs and product discounts for FY2015, Rio still has a 45% cash margin. While large expansions are underway at Rio's mines (which will further reduce unit costs) other smaller companies with lower grades and higher costs are falling by the wayside. Recently both Sherwin Iron (ASX: SHD) and Western Desert Resources (ASX: WDR) have become casualties and many more small-to-medium size iron ore companies are expected to fall.  This will benefit Rio by reducing supply from other sources.

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The date of October 3 is looming for shareholders of Telstra Corporation Ltd (ASX: TLS) to decide whether to participate in its $1 billion off-market share buy-back. There are both risks and benefits in taking part.

Who are the beneficiaries?

The two main beneficiaries are shareholders with a self-managed super fund (SMSF) in the savings phase (taxed at 15% on investment returns) and to a greater extent a SMSF in the pension phase (zero tax). This is because imputation tax credits comprise a large part of the return. A SMSF can derive the maximum benefit from these credits which are designed to compensate shareholders because Telstra has already paid 30% tax on profits.

Am I better off selling on market or via the buy-back?

After accounting for the imputation tax credit, most shareholders are likely to benefit as the shares can be sold back to Telstra for a higher price than if sold in the market. However, the buy-back calculator at, Telstra.com/buy-back, is very helpful as it incorporates a range of assumptions, which will vary greatly depending upon individual circumstances.

Are there any risks/disadvantages?

1. As reported in yesterday's AFR, it may be classified by the Tax Office as a wash sale (buying and selling shares for tax reasons) if a shareholder sells into the buy-back and then restores the holding by buying back on the market. This may be overcome by buying the shares back at least 30 days later.

2. Some shareholders may be subject to capital gains tax if the shares sold into the buy-back have not been held for at least 12 months.

3. Due to the timing of the buy-back, shareholders will have to wait a lengthy period (post July 1, 2015) for the imputation tax credit refund.

What are the benefits for shareholders?

1. Specifically, as the company tax rate is about to be reduced, Telstra is benefiting shareholders by returning, as soon as possible, a one-off increase in the franking balance of $258 million.

2. Telstra has ample funds to take care of the operational and liquidity needs of the business. This is one requirement Warren Buffett has for approving of buy-backs.

3. More generally, buy backs are of benefit to all shareholders by lifting earnings per share (EPS) and may provide shareholders a price nearer to asset value if the share price is below net tangible assets (NTA) backing.

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The S&P/ASX 200 Index (INDEXASX: XJO) is the main benchmark for the Australian equity market. While there are approximately 2,000 stocks listed on the ASX, the top 200 stocks make up almost 80% of the total value of the market. Inclusion in the index is regarded as being very positive as institutional managers are governed by their mandates, which often restrict them to investing in either the top 200 or 300 stocks.

So before and after the inclusion date, the weight of institutional money potentially drives the share prices higher independent of company fundamentals. While this is relevant for the short term it is also relevant for the long term so let's look at two stocks to be added.

Liquefied Natural Gas Limited (ASX: LNG)

The Perth-based company owns a technology called Optimised Single Mixed Refrigerant (OSMR) used to improve LNG plant performance. This includes significant improvements in LNG output and overall process efficiency. The company employs a relatively simple tolling model, by processing a customer's gas and charging for the liquefaction process. This technology is to be used in the company's Magnolia and Bear Head LNG projects in the United States as well as the Fisherman's Landing project located in the Port of Gladstone in Queensland. A prior article when the share price was $2.65 (currently $4.35) listed six near-term catalysts for further upside.

TFS Corporation (ASX: TFC)

TFS Corporation is a Western Australian company that has become the world's largest owner and manager of sustainable Indian Sandalwood Plantations. It also owns the distiller of sandalwood oil named Mt Romance. Sandalwood has a well-entrenched market throughout the world, particularly in the fast growing economies of India and China. Being the world's most popular tropical hardwood, it continues to increase in price each year. It has risen at a compound rate of over 15% per annum since 1990. Recently, I penned "From little things big things grow" and revealed four ways in which the company could continue to drive the share price higher.

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Unless you are planning an overseas holiday, a fall in the Aussie dollar is not necessarily a bad outcome. As investors it is potentially rewarding to invest in stocks with great fundamentals that have seen their share prices capped by the prevailing high currency.

In recent days the currency has plummeted from a high of US$94.02 to a low of US$90.92. This fall by over 3 cents represents a 3.3 % tumble. Before discussing individual stock beneficiaries, let's examine if the decline is sustainable. Many market commentators are anticipating further currency weakness as there are several factors at play including:

1. Chinese data releases indicating restrictions on credit growth which formerly underpinned investment demand.

2. A detrimental impact on Australia's terms of trade caused by the steady decline in iron ore and coal prices.

3. The final straw appears to have been a strengthening US dollar due to potential upward pressure on cash rates in the United States.

What stocks are the main beneficiaries?

In a recent article I highlighted five stocks including Rio Tinto Limited (ASX: RIO), where a 10 % fall in the Aussie dollar would result in a $515 million lift in full-year 2014 underlying earnings. Similarly, BHP Billiton Limited (ASX: BHP) gains approximately $100 million in net profits from every 1 cent fall in the currency.

The broking division of leading global bank Citigroup recently looked at the currency impact on FY2015 net profit after tax (NPAT) for Australian stocks. The parameters were a fall in the currency from US$95.00 to a low of US$88.00. In addition to BHP and Rio Tinto, some of the stocks highlighted were:

Cochlear Limited (ASX: COH) – projected NPAT currency uplift of 23%.

Fortunately the fall in the currency coincides with a surprise improvement in second half earnings during the August reporting season.

Newcrest Mining Limited (ASX: NCM) – projected NPAT currency uplift of 25%.

While the recent profit release was hampered by another big write-down (largely attributable to Lihir), the company's underlying profit was well ahead of expectations.

Santos Ltd (ASX: STO) – projected NPAT currency uplift of 19%.

The company surprised with an earlier-than-expected dividend increase. Another dividend increase is expected from the GLNG project which is converting coal seam natural gas (CSG) to liquefied natural gas (LNG) for export to global markets.

Western Areas Ltd (ASX: WSA) – projected NPAT currency uplift of 28%.

Like Santos, the dividend surprised to the upside during the reporting season. In addition, the overall result significantly exceeded market expectations.

The post 4 stocks to benefit from a falling Aussie dollar appeared first on The Motley Fool Australia.

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However, before considering individual stocks, let's consider the winners in general terms as follows:

1. Australian stocks with U.S. operations.

2. Resource companies with receipts in US dollars.

3. International investments such as overseas-listed shares.

4. Retailers who have suffered from consumers buying online from overseas competitors. However, some of these gains are tempered by greater costs to import inventory.

5. To a lesser extent, those companies with both U.S. and European operations.

What stocks have additional tailwinds?

In addition to the falling Aussie dollar, it's always preferable to have additional factors supporting a stock purchase. Thus, I have cherry picked stocks that are also beneficiaries of:

Exceeding consensus forecasts in the August reporting season.

In some cases, relatively high dividends that provide a measure of share price support.

The selections are as follows:

Rio Tinto Limited (ASX: RIO). The effect on full-year 2014 underlying earnings of a 10 % fall in the Aussie dollar would be a $515 million profit boost for arguably the world's best iron ore stock. Additionally, in my opinion, Rio Tinto was the standout during the August reporting season by convincingly beating consensus expectations.

The majority of brokers subsequently lifted the target price for the stock to an average of around $80. This represents a 30% upside from yesterday's closing price of $61.77. Finally, the company has all but promised higher capital returns after the full-year 2014 result and is fast becoming a yield play with projected dividend yields for FY2014 and FY2015 of around 3.8% and 3.9% respectively.

The blood plasma product manufacturer CSL Limited (ASX: CSL) currently earns in excess of 40% of its revenue in North America. CSL's reporting season result exceeded both consensus and company guidance. This was largely attributable to volume-driven gains which were indicative of market share gains. Revenue growth in CSL Behring was a standout. With a Return on Investment (ROI) of over 30%, a dividend yield of 2% is entirely prudent but doesn't provide downside support. However, the recent results and potential currency windfall will likely provide share price outperformance.

Honourable mentions should also go to BHP Billiton Limited (ASX: BHP), which gains approximately $100 million in net profits from every one cent fall in the currency. Also, dividend yields for FY2015 and FY2016 are forecast to be around 3.8% and 3.9% respectively.

Computershare Limited (ASX: CPU) also derives 79% of its revenue from overseas, including 42% from the USA. QBE Insurance Group Ltd (ASX: QBE) reports in U.S. dollars and garners approximately 72% of its revenue from overseas, including 38% from North and Latin America. Projected dividend yields for FY2014 and FY2015 are 3.2% and 4.2% respectively.

The post 5 stocks to profit from a falling Aussie dollar appeared first on The Motley Fool Australia.

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Despite the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) falling marginally yesterday, Impedimed rose 12 cents or over 30% to close at 51 cents.

Yesterday's game-changing announcement:

The company was granted reimbursement status in the U.S. for all relevant cancer types using the L-Dex procedure for the assessment of lymphedema. This is a progressive swelling that may occur in patients following cancer treatment. The reimbursement status enables all Medicare eligible patients to be reimbursed by the U.S. government.

CEO Richard Carreon said: "This is a real game-changer for Impedimed". The new addressable market is estimated to be in excess of US$ 350 million per annum as lymphedema affects nearly 1 in 3 cancer survivors and there are over 900,000 new cancer cases per year.

Are there catalysts for further share price upside?

A number of positive potential tailwinds include:

1. A strong pipeline of product opportunities.

2. Additional non-medical applications.

3. Expanding into new geographies.

4. Creating new and leveraging existing partnerships.

5. Targeting top 200 practices in key Medicare states. Already 7 out of 10 U.S. cancer institutions have commenced using L-Dex.

The post Here's why this healthcare stock rocketed up 30% yesterday: Is there more to come? appeared first on The Motley Fool Australia.

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As a shareholder, do you want to become a part owner in 91 Telstra stores and 14 Telstra business centers? These represent 66% of Vita Group Limited's (ASX: VTG) portfolio of stores. The intention is to increase this weighting against other stores which include Fone Zone, One Zero and Next Byte – Apple's premium reseller. Vita Group's activities are the selling and marketing of technology and communication products and services through its retail store brands.

What: The day prior to the release of full-year results for Vita Group its shares were trading at 78 cents. In the three trading days since the shares have hit a high of $1.03 and are currently trading at 99 cents. This represents a gain of 27%.

Why the positive share price reaction?

The current dominant cause de jour for any stock appreciation is sustainable and increasing dividends. The company's dividend payments have trebled over the period FY2012 to FY2014 and have increased 64% in FY2014 to 4.64 cents. Grossed up for franking credits this represents a yield of 6.7%. Other factors propelling the share price higher include:

1. Consistent performance. This is the tenth consecutive half of EBITDA growth.

2. Chasing profitability not scale. While group revenue was up 4%, both underlying NPAT and EBITDA were up 66% and 22% respectively.

3. Results underpinned by the outstanding telecommunications segment, with EBITDA growth of 25%.

4. Improving Next Byte performance. Despite this, the company has suspended further planned store rollouts as higher growth prospects are in prospect as outlined in point 5 below…

5. Outstanding prospects in business to business (B2B) in particular, which is part of the telecommunications segment. Vita Group chief executive Maxine Horne stated that: "We are now well positioned to stake a meaningful footprint in the B2B market… having enhanced our offering to SME and enterprise customers".

What is Vita Group's link to Telstra Corporation Ltd's (ASX: TLS) performance?

Vita Group is a key strategic partner of Telstra. The partnership with Telstra began 18 years ago and will last another five, as well as the potential for extensions contingent on certain benchmarks being met. Implementing Telstra's strategic priorities, including customer advocacy, will result in a pre-arranged sharing of revenues.

Vita also has further alignment toward Telstra, as there are a lot of Telstra referred clients.

Telstra's strong network advantage is an excellent selling point for Vita Group.

The post Who wants a 6.7% yielding stock with growth linked to Telstra Corporation Ltd? appeared first on The Motley Fool Australia.

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Recent statements reflecting growing fears for banks:

1. Reserve Bank of Australia governor Glenn Stevens commented recently about the "scant" compensation for risk in financial markets.

2. Prior to the comments above, David Murray advocated that the big four would need to hold an additional $23 billion in capital at the recent (FSI).

3. The unlisted and outperforming Peters MacGregor Global Fund (PMGF) is managed by Wayne Peters, whose investing style is very much informed by Warren Buffett. He stated in early July that Australian banks are heavily reliant on the goodwill of the offshore bond markets to fund housing loans. U.S. banks like Wells Fargo & Co (NYSE: WFC) fund home lending by using 90% of funds held on deposit. In Australia that figure is only 65%, which leaves Australian banks at the mercy of world bond markets to fund the balance.

4. In revealing full-year results for Australian Foundation Investment Co.Ltd. (ASX: AFI), managing director Ross Barker stated that he would agree with any tightening of the banking system that would "perhaps reduce a bit of their…returns".

How will banks be affected?

According to a report in today's AFR, the banks' price fall scenario could well occur:

If we see big losses for the banks courtesy of a correction in both share and property prices.

Or if banks' profits are reduced by regulation requiring higher capital reserves. If forced to hold more capital, the overall returns will be reduced, especially for the Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd. (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ). This in turn would restrict the ability of banks to keep paying dividends at current levels, provided they don't derive extra profits from other sources.

Or if we see a reduction in activity levels at the banks. Riskier activities conducted by certain sections of the banks may be curtailed so as to protect customer deposits.

Or if the banks' cost of borrowing rises. Bond holders may be required to accept more risk. In doing so they would demand a higher interest rate.

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Why the negative share price reaction?

Some of the negativity may not relate to the profit release at all, but nervousness preceding a case before the Federal Court today. This will determine whether litigation funders can take a slice of the winnings from all class action members, even if they have not signed up to a funding agreement.

The outlook statement also revealed some cautionary comments as follows:

1. There is more competition in Australia and internationally, reflecting a maturing industry.

2. There may be more regulation in Australia as the Productivity Commission's report is due in September 2014.

Potential positive future catalysts are:

Open class actions against the major banks. While IMF is presently unable to reliably measure the impact on revenue or profit, this is a potential case for completion in FY2015. As I wrote in "Can Bentham IMF Ltd win big from beating the banks?", this class action is unique and may significantly raise the size of the damages. Additionally, Bentham IMF will take 22.5% of any winnings, subject to approval by the court.

A surprise upside from a number of U.S. funded cases. The company has taken a policy position to not disclose specific details about the U.S. investments. So the market is unaware of the potential size of the cases and potential returns.

Some other highlights from the report

1. The estimated claim value of Bentham IMF's cases increased 26% in the year to 30 June 2014.

2. A final fully franked dividend of 5.0 cents was declared.

3. The announcement of a dividend reinvestment plan (DRP), whereby shareholders may receive a cash dividend, or receive shares in Bentham IMF at a 3.5% discount. This is subject to certain parameters after the record date for the dividend on 19 September 2014.

The post Here's why Bentham IMF Ltd crashed 8% today appeared first on The Motley Fool Australia.

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What: Shares of James Hardie Industries plc (ASX: JHX) are down $1.01 or 7.2% after releasing its first quarter profit results today. This compares to the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) which finished up 0.3%.

Why the negative price reaction?

It seems a weaker recovery in the U.S. than was originally anticipated at the beginning of the year is the main cause. Chief executive Louis Gries stated that the company had forecast that U.S. housing starts would rise 15% to 18% compared to last year. They now look like increasing only 6% to 8%.

That is not to say that the operating environment for the building products maker has not improved when compared to the same quarter last year. However, operating conditions have forced the company to lower its full-year profit expectations significantly. FY 2015 net operating profit guidance, which was formerly expected by the market to be between US$226 million to US$261 million, has now been guided down to between US$205 million to US$235 million. This is a 10% adjustment to expectations.

Other negative factors:

Apart from the weaker-than-expected operating environment in the United States, other factors weighing upon the share price included:

Poor manufacturing performance.

Asia Pacific earnings were flat year-on-year.

Higher input costs.

Increasing competition. 

The post Why has James Hardie Industries plc plunged today? appeared first on The Motley Fool Australia.

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