Companies like Apollo Group (APOL), Corinthian Colleges (COCO) and Strayer Education (STRA) were first hammered on news that their graduates are significantly more likely to default on federal student loans than alumni of traditional four-year colleges.  Then Barron’s quoted an analyst saying the Department of Education’s estimates are probably accurate, bringing more pain for these stocks.

Worse yet, for-profit education stocks are a subsector of the consumer discretionary space.  In this market environment, consumer discretionary names are tough bets from the long side.  Even so, there is opportunity among for-profit education names.  You just need to look outside the U.S. to China.

Consider New Oriental Education (EDU).  EDU is a Chinese provider of foreign language training, test preparation services and software products.  Shares of New Oriental were up slightly last month while the U.S.-based education stocks were deep in the red.

On a fundamental basis, there is a lot to like with New Oriental.  China takes education seriously.  As the country continues to boost its presence on the global economic stage, more Chinese citizens will need to learn foreign languages.  This will boost demand for New Oriental’s services.

The smart money crowd apparently likes New Oriental as well.  Second-quarter 13F filings show that the stock is among the favorite Chinese American depositary receipts owned by professional money managers.

To be sure, New Oriental is no stodgy blue chip.  This is a growth stock with growth stock traits.  The market cap is just $3.73 billion, putting New Oriental barely into the realm of the mid-cap universe.  Its trailing P/E is over 49, the forward P/E is over 28 and shares trade at almost 9x book value.  Year-to-date, the shares are up more than 30%.  That compares with a loss of 5% for the iShares/FTSE Xinhua China 25 Index Fund (FXI).

Recent performance underscores how New Oriental is a preferred option in the for-profit education space.  It’s also one of the better bets among all U.S.-listed Chinese stocks.  New Oriental may face some near-term headwinds simply because of negative market sentiment, but support for the stock seems firm at the 50-day moving average.  If EDU can hold the $97-$100 range heading into the fourth quarter, it could find its way above $110 by the end of this year.

To play the always-optimistic Chinese education market in a difficult year, go with EDU. All the best.

Disclosure covering writer, editor, publisher, and affiliates: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

This confluence of factors makes emerging markets even more appealing for investors who want capital appreciation and growth.  That said, not all emerging markets are created equal.  Not surprisingly, Asia is frequently a favored destination for investors who want to take advantage of emerging markets growth.  Two of the favorites are Thailand and Indonesia.

To say that Indonesia is one of the most compelling emerging markets opportunities is an understatement.  We’ve discussed how investors can get exposure to the Indonesian market before.  It’s worth noting that even on down days for U.S. stocks, the two Indonesia-specific ETFs traded here in the U.S. often find a way to trade higher.

Outside of ETFs, few Indonesian stocks are listed on U.S. exchanges.  We’ve found one that looks like an ideal trade for this market environment: Perusahaan Perseroan PT Telekomunikasi Indonesia (TLK).  OK, that’s a confusing name, but TLK is pretty straightforward.  This is a telecom stock, usually referred to simply as PT TELKOM.

The telecom sector is a favorite hideout in turbulent markets because telecom stocks are often less volatile due to their robust dividend yields.  TLK certainly swings around more than stocks like AT&T (T) or Verizon (VZ), but that is to be expected.  After all, TLK is an emerging market stock and the others are two of the stodgiest U.S. blue chips.  TLK’s current yield of 5.9% also trails the average yield of 6.45% of AT&T and Verizon.

TLK’s last dividend was a very nice $2.32 a share.  In the past six months, TLK shares are up 10% compared to a 7% gain for AT&T and a 2% run for Verizon.  Sometimes it’s worth sacrificing some yield for better capital appreciation.  You’re also tapping into one of the world’s top emerging markets.  To go with an Indonesian telecom while the U.S. market struggles, go with TLK.  All the best.

Disclosure covering writer, editor, publisher, and affiliates: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

That’s good stuff.  Additionally, in the near-term, a report released earlier this week by Kotak Mahindra Old Mutual Life Insurance says Indian stocks will rise another 15% to a record high by March 2011.  Which individual Indian equities are poised to benefit?  We’ve previously examined an Indian ETF, but today we’re going to look at a superb Indian brand.  Tata Motors (TTM) is India’s top automaker and the owner of the Jaguar and Land Rover luxury brands.

China is now the world’s largest car market, having surpassed the U.S. earlier this year, but India is on the rise as well.  On Tuesday, Tata said it sold almost 67,800 vehicles in July, a 41% increase from July 2009.  Sales of commercial vehicles jumped 26%, with light commercial vehicle sales popping 15%.  Sales of medium and heavy commercial vehicles surged 43% over July of 2009, Tata said.  On top of that, Tata said it posted a fiscal first-quarter profit of $430 million after enduring a loss of $71 million in the year earlier period.  Total sales came in at $5.8 billion.

In a testament to the strength in Tata’s shares, the stock was up more than 4% yesterday in U.S. trading while the broader market was considerably weaker.  Tata shares hit another fresh 52-week high on volume that was nearly double the daily average.  Some investors are understandably gun-shy about the auto sector after the calamity of the last two years.  General Motors became property of the U.S. government.  Chrysler is an afterthought, and though Ford (F) has rebounded, it doesn’t pay a dividend.

On the other hand, Tata has a fair dividend yield of 2.3%.  It has also paid a dividend in 52 of its 54 years as a public company, making Tata an ideal way for a dividend hunter to tap into emerging markets growth without incurring significant risk.

Not impressed by the fundamentals?  Tata’s technical outlook is also appealing.  The stock has recently broken out in a big way and is solidly above its 50- and 200-day moving averages.  Tata’s stock isn’t a runaway train, but it sure is acting like a fast car.  Investors who bought on our recommendation in April 2009 are now sitting on gains of about +175%.  To buy into India’s booming auto market, go with Tata Motors.  All the best.

Disclosure covering writer, editor, publisher, and affiliates: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

Represented by the symbol “Li,” lithium is the lightest and least dense of the solid elements. Lithium production has been growing for decades thanks to its use in small batteries.  Powering a car with electricity takes more than a few AAA cells, but it can be done.  The idea is increasingly popular as oil prices remain historically high.

This is good news for Chile. This slender South American country is the largest lithium producer in the world.  It is also good news for Sociedad Quimica y Minera de Chile ADR (SQM), often referred to by its English translation of Chemical & Mining Co. of Chile (SQM). The firm is a top holding in the first lithium-specific ETF. Obviously, the boom in lithium demand could be a boon for SQM. Driven by demand for hybrid and electric cars, lithium demand is expected to swell to 250,000 tons annually up from current levels of 100,000 tons.

Wall Street is taking note of the bullish trend. Several analysts think SQM could make its way to $70, well above the $36 area where the stock currently trades. UBS analysts put a $73 price target on SQM earlier this year.

SQM plans to invest $350 million to bolster its lithium production.  This may lead some investors to look at SQM as a company focused solely on lithium, but that’s not the case. SQM also offers investors significant exposure to increased global food demand. The company is one of Latin America’s top fertilizer producers, competing with the likes of Agrium (AGU) and Potash (POT). The fertilizer exposure highlights the diversity of SQM’s business model.  Investors are buying much more than lithium when they purchase SQM shares.

That said, it looks like lithium demand is driving SQM, at least in the short term. Last week, the company said it is talking with several Japanese automakers about their lithium needs. SQM is in what Fox Business News called “deep” discussions with Nissan. A sales agreement with Nissan to supply the Japanese auto giant with 10,000 tons of lithium per year could boost SQM’s top line by $55 million per year.

Valuations reflect that as SQM trades at 23.5 times forward earnings, but that really isn’t too rich as far as true growth stocks are concerned.  SQM has undergone a strong runup in July and may be vulnerable to a short-term pullback, although it should find support at $34.  To capitalize on rising lithium demand while still remaining diversified with fertilizer, go with lithium producer SQM.

Disclosure covering writer, editor, publisher, and affiliates: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

We first discussed the cloud computing trend on March 2, 2009. Although we did not officially recommend Salesforce (CRM) we highlighted how Salesforce was using “the cloud” to their advantage. Since then, CRM has grown an astounding 235%! CRM has risen on the strength of their market position and industry trends in cloud computing. In January, we posted a cloud computing follow-up discussing other merits of the technology. It’s time to revisit the cloud.

Large organizations are abandoning boxed software and opting for more agile software that is supported off-site – cloud computing.  According to the National Institute of Standards and Technology, cloud computing incorporates five essential elements:

• On-demand self-service
• Broad network access
• Resource pooling
• Pay-for-use service
• Elastic scale

Providers market the services in three different models: software-as-a-service, platform-as-a-service, and infrastructure-as-a-service. Software-as-a-service (SaaS) delivers a complete single software solution as opposed to a shelf-bought application. A SaaS example for customer relationship management would be Zoho or SalesForce. Platform-as-a-service (PaaS) is more complex. It offers development and middleware hosted by the vendor – and is more expensive for businesses. An example of PaaS would be Google AppEngine or Long Jump. Finally, infrastructure-as-a-service  (IaaS) is the raw infrastructure for things like servers and storage. IaaS is sold by companies like Amazon Web Services and GoGrid.

Morningstar recently joined the cloud computing conversation.  They distinguished the “public cloud” from the “private cloud”. The public cloud relates to applications like Google docs or Yahoo mail. These applications are shared by multiple users. On the other hand, the private cloud relates to enterprise-level solutions like the ones offered by the companies above. These services are usually behind a company firewall and only available to company users.

Businesses are moving towards the private cloud for one primary reason: support. The companies that support these services the best will do well as large companies move their antiquated software into cloud services. That will help marketers of cloud services. We expect even more momentum to build in the cloud computing space. Make sure you get in on the action.

Disclosure covering writer, editor, publisher, and affiliates: Long QQQQ. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

Weather is also a factor for stocks. For instance, utility companies tend to trend upward in especially hot summers. It makes sense. Investors expect energy output to be higher as consumers cool their homes and businesses cool their offices. That’s important to consider given this summer’s weather pattern. Whatever is happening outside your window, the summer of 2010 has been especially hot in many areas of the U.S.

A recent analysis from Ned Davis Research reported, “Cooling degree days (CDD), measured as monthly deviation from trend, rose to 56 in June, the most since August 2007. CDD has been at least as high on only three other occasions since 1983, all of which were mid-summer months that registered strong growth in utilities output.” Higher utility output means more revenue for utility companies.

This may be good news for revenues, but what about expenses? How do these utilities generate electricity, and are their expenses reasonable compared to revenues? Each utility generates electricity in different ways. Companies may use coal, wind, natural gas, or even nuclear power to create electricity. Right now, those using natural gas are in a particularly attractive situation. Why? Because natural gas prices are low and will probably stay that way for some time.

Natural gas has been trending down since mid-2008 when it reached almost $14 per million BTU (MMBtu). Since then prices have settled down near $4.60 MMBtu – a virtual crash in the natural gas market. This is horrible news for anyone who went long in 2008 but great news for companies dependent on natural gas.

OGE Energy Corporation (OGE) stands to benefit from the seasonal rise in the utility sector. OGE is the Oklahoma City-based parent company of OG&E Electric Services, Enogex LLC, and OGE Energy Resources. The firm services utility customers in Oklahoma and western Arkansas. They generate electricity from coal and wind, but their largest source is natural gas. Low prices for natural gas are keeping their expenses low during this hot summer.

The numbers look good for OGE as well. Their profit margins are healthy at 8.5% with $3.14 billion in revenue. Year-over-year earnings growth is an astounding 44%. The charts tend to agree with these positive numbers. OGE stock prices rose with the broader market since March 2009 and peaked in early May. Later that month, the shares lost steam, trading as low as $34. Since then, it has been trending higher, and last week prices broke above their June peak and are once again trading above $38.

We like OGE’s chances to move above $42 and resume a longer-term trend. To own a seasonal utility with low expenses in a long-term uptrend, buy OGE.

Disclosure covering writer, editor, publisher, and affiliates: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

The oil industry has already reacted to political pressure. Offshore drilling costs are rising. Reuters reports: “African independent oil and gas company Afren said it had already experienced a 7-8 percent increase in costs for a project in Ghana following the safety response of Ghanaian authorities.” No doubt American offshore production will be affected soon. Washington politicians will ride the proverbial wave of public discontent until it’s no longer expedient. Is the energy sector doomed?

We don’t think so. In recent days, crude oil prices have turned up while the euro appears to be stabilizing against the dollar. The loss of an estimated 210,000 gallons of oil gushing into the Gulf every day isn’t helping. Every time a “top-kill” fails, investors look for less PR-toxic production techniques.

White House Chief of Staff Rahm Emmanuel once said: “Rule 1: Never allow a crisis to go to waste.” We think this crisis fits Emmanuel’s proclamation. With oil prices rising and offshore production looking unattractive, we turn our attention to the great frozen north where water is sparse and oil sand abounds. Canada boasts 54,000 square miles of oil-soaked earth containing approximately 1.7 trillion barrels of oil. That’s quite a deposit, and it’s far away from offshore rigs.

One company situated to profit from Canada’s landlocked deposits is Cenovus Energy Inc. (CVE). A 2009 spinoff from EnCana Corp (ECA), Cenovus is headquartered in Calgary, Alberta. Most of the company’s production depends on their bitumen reservoirs. Their specialized techniques, production leases, and lower steam-to-oil production ratio, make CVE well-suited to harvesting the northeast Athabasca oil sands deposit.

Even better, despite the specialized processing techniques oil sand requires, there’s no drilling. Cenovus’ bitumen production is offset by other natural gas and crude oil production. CVE also has partial interest in refineries in Illinois and Texas.

The Cenovus books look positive. The firm has $378 million in cash with $6 billion in debt. However, $10.6 billion annual revenue and $2.8 billion earnings give CVE a decent 13.3 trailing P/E ratio. With the Canadian dollar running near parity with the US dollar, currency exchange is presently not a factor.

After bouncing off support on May 26, CVE jumped to nearly $28. Though a small correction may be in order, we think CVE is poised to climb as offshore oil companies fall. We agree with Jeff Saut, a top Raymond James strategist who rates Cenovus (CVE) “outperform.” Oil is rising, and we shouldn’t forget that opportunity can be found in a crisis. To go long onshore oil production, go with CVE.

Disclosure covering writer, editor, publisher, and affiliates: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

One such stock is Newpark Resources (NR), a Texas-based provider of drilling fluids, temporary worksites and access roads for oil and gas drillers. Yes, Newpark has some exposure to the offshore business, but the company is more of an onshore drilling play. They specialize in land-based construction as well as environmental and support services. That’s an important distinction when the future of new U.S. offshore drilling activity is murky at best.

Some investors may take a pass on Newpark shares because of the sub-$10 share price. That could prove to be a mistake. Yes, many mutual fund managers don’t invest in stocks priced under $10, but many don’t outperform their benchmarks, either. There are plenty of hidden gems trading for less than $10, and Newpark Resources might just be one of them.

Earlier this month, the company reported first-quarter earnings of $7.8 million, or nine cents a share, compared with about break-even a year earlier. More importantly, the top-line growth was impressive. Revenue surged to $160.8 million from $126.9 million. According to Zacks Investment Research, it was the third straight quarter Newpark has beaten the Zacks estimate by more than 100% and the fourth consecutive time the company reported better-than-expected results.

Sell-side analysts have taken note of Newpark, too. Wunderlich Securities boosted its price target on Newpark to $12 from $8 earlier this month, citing strength in Newpark’s core fluids and environmental services businesses. That’s more than 50% above where the stock currently trades. Newpark shares have rallied about 70% in the past three months, sharply outperforming larger oil services names and the broader market.

Even with this exceptional momentum, it’s hard to call Newpark an “expensive” stock. The shares trade for less than 16 times estimated 2011 earnings and less than two times book value. Those valuations compare favorably with larger, riskier oil services stocks. Given Newpark’s very reasonable valuation, the shares could offer a sanctuary to wary energy sector investors. To go with an onshore oil services play when the political winds for energy are shifting inland, go with NR.

Disclosure covering writer, editor, publisher, and affiliates: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

MLPs are usually involved in the energy business, but they typically won’t whipsaw your portfolio with every price move in the commodities market. Most MLPs are involved in the transportation of oil and natural gas through pipelines owned by the partnership. Regardless of the price of oil, it still needs to move from Point A to Point B. This allows MLPs to execute one of the most predictable business plans around.

There are plenty of MLPs on the market today. One of the best is Kinder Morgan Energy Partners, LP (KMP), the second-largest publicly traded MLP by market value. Houston-based Kinder Morgan operates 14,300 miles of natural gas pipelines, over 1,500 miles of oil pipelines, and holds a stake in another 1,700-mile oil pipeline. Those statistics highlight the company’s business – but what you really want to know about is Kinder Morgan’s robust yield.

Earlier this month Kinder Morgan raised its first-quarter distribution by 2% to $1.07 per unit – or $4.28 on an annual basis. Stocks like Coca-Cola (KO), Johnson & Johnson (JNJ) and Procter & Gamble (PG) are often considered “good” dividend earners, but not one pays anything like Kinder Morgan.

The current distribution rate gives Kinder Morgan a yield of around 6.3%. Does this mean it is riskier? The question is fair. Conservative investors want to be able to hold their income stocks for an extended period without worrying about capital loss – but they also like capital gains. Kinder Morgan delivers. Over the past five years, while the Dow Jones Industrial Average was up 10% and the S&P 500 rose just 7%, Kinder Morgan jumped more than 40%.

Kinder Morgan also has the advantage of size. As one of the largest, most liquid MLP issues, KMP is in the portfolio of just about every investor who wants exposure to this niche. That’s why it is one of the top holdings in MLP exchange-traded products like JPMorgan Alerian MLP Index ETN (AMJ) and Credit Suisse Cushing 30 MLP Index ETN (MLPN). This gives KMP a natural base of support.

Kinder Morgan is forecasting a per-unit distribution of $4.40 this year compared with $4.20 last year. This means another distribution increase is probably on the way. Distributable cash flow in the first quarter jumped 36% from the year earlier period, so to say this dividend is safe may be an understatement. The power of income cannot be understated. That alone makes Kinder Morgan worth a look. To go with a solid, dividend-paying energy infrastructure MLP, go with Kinder Morgan (KMP).

Note:  After publishing, a Kinder Morgan spokesperson informed us that the mileage figures are more accurately stated as:  “Kinder Morgan Energy Partners operates and owns approximately 24,000 miles of natural gas pipelines, 8,000 miles of pipelines that transport refined petroleum products such as gasoline, diesel and jet fuel, and more than 2,000 miles of pipeline that transports crude oil.”

Disclosure covering writer, editor, publisher, and affiliates: Long AMJ. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

Investors are more likely to know 3M as the maker of Post-It Notes, Scotch Tape, handheld video projectors, and scores of other familiar products. Yet 3M shares are no slouch. Over the past two years, while the Dow lost about 12%, 3M was actually up. 3M outpaced its peers in the last year, too, gaining about 60%, vs around 40% for the Dow.

How a company that is over a century old can be relatively anonymous on Wall Street is a mystery. Short-term traders rarely think about 3M. Conservative, long-term investors are the more typical 3M holders. The company creates steady income, having paid a dividend 375 consecutive quarters and roughly 75% of the quarters since its founding. 3M raised its quarterly dividend by three percent earlier this year to 52.5 cents a share. The most recent dividend increase represents the 52nd straight year the company has raised its payout. 3M has returned $16 billion to shareholders over the last five years in the form of dividends and share repurchases.

But what do 3M shares have to offer in the near-term? One highlight is a recent upgrade of the stock by a Morgan Stanley analyst who said he is ”almost certain” 3M shares will trade higher in the next month. Moreover, the current market environment has been kind to industrial stocks as highlighted by the performance of the Industrial Select Sector SPDR (XLI) over the past six months. The ETF is up 15% in that time. 3M, XLI’s fourth-largest holding, is up over 20% in the same span. Despite the recent run, the stock is still a reasonable value at less than 15 times forward earnings.

3M makes thousands of boring but essential products. This is a testament to its versatility and its ability to produce prodigious profits. The company reports first-quarter earnings on April 27th. We would not be surprised to see 3M blow out the estimates. Though the stock may be unknown to many investors, you can still profit from their seasoned management team, conservative growth pattern, and steady dividends. This week, go with “hidden gem” 3M

Disclosure covering writer, editor, publisher, and affiliates: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.