One niche we like is cloud computing. We’ve previously highlighted the cloud computing trend. We talked about several cloud computing stocks that may help investors profit from the group’s rapid growth. Today we add one more name to that list: Informatica Corp. (INFA). California-based Informatica boasts some strong fundamentals. In the most recent quarter, Informatica reported its profits rose 29% and revenue surged 21%.

Analysts are forecasting earnings growth of 11% in 2010 and 20% in 2011. Those are impressive statistics. According to Investor’s Business Daily, which features Informatica among its top 100 stocks, the number of mutual funds owning Informatica shares rose to 213 from 188 during the last quarter. That’s another positive sign that the smart money crowd is taking note of the stock.

Informatica is taking steps to enter new business segments, highlighted by the company’s January acquisition of Siperian, a master data management company. This was Informatica’s first foray into that space and the company’s biggest acquisition to date. The Siperian buy was greeted warmly by both investors and customers. It makes sense as master data management is one of the fastest growing sub-sectors in the tech space.

Given all of the news, it isn’t surprising to see analysts enthused about Informatica. Just this week Broadpoint AmTech mentioned Informatica as one of its top cloud computing picks. The stock is up more than 15% in the past month and touched a new 52-week high Tuesday on heavy volume.

Whether you call Informatica a growth stock or a momentum stock, the signs are decidedly bullish at this point. Yet the company still has value relative to other tech stocks. For example, the stock trades for nearly five times book value and over 22 times forward earnings. Compare these numbers to Amazon (AMZN), which is trading around 11 times book value and 34 times forward earnings. Informatica looks cheap in comparison.

Regardless of comparisons, Informatica is a strong stock in a strong sector. This means more gains could lie ahead. To play the cloud computing angle with a strong company, go with INFA.

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.

Of the BRIC nations, Russia has the fewest ADRs trading on U.S. exchanges and just one ETF. Furthermore, Russia is mostly a play on oil and natural gas prices, making diversification difficult. But what about India? Despite the fact that India is the world’s largest democracy and the third-largest Asian economy behind Japan and China, the “I” in BRIC is often forgotten by U.S. investors. Yet this fast-growing market offers plenty of opportunity.

We’ve discussed investing in India before, and now we are looking at the subcontinent again. Investors have plenty of choices when investing in India from the U.S., with many ADRs and several ETFs and ETNs now available. We like WisdomTree India Earnings ETF (EPI). On the surface, EPI offers at least one primary advantage over other ETFs: liquidity. EPI easily tops several other India products in average trading volume with more than one million shares changing hands on a given day. Thus far in 2010, EPI has also outperformed two of its chief rivals, PowerShares India ETF (PIN) and iShares S&P India Nifty 50 Index (INDY).

Those are nice anecdotes. But what you really need to know about India is the long-term growth story. Indian officials recently met with Saudi Arabia in an effort to increase oil shipments. When a country needs more oil, it is usually a sign that the manufacturing sector is growing and needs energy resources. Some estimates show that India’s GDP is expected to grow by 14% annually in 2014, and by 2025 the country may have a larger economy than the U.S.

One drawback to EPI may be a lack of sector diversification. Industrial materials and financial services names account for 52% of the portfolio. That said, EPI has moved above its 50-day moving average. If it can clear its January peak of $23.65, a run to the high 20s is possible.

EPI has an expense ratio of 0.88% and currently over $720 million in assets. We also like how it recently broke out of congestion and could be on the verge of a healthy uptrend. Overall, EPI probably ranks high on the list of India ETFs currently available to U.S. investors. To buy into India’s growth story, go with EPI.

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.

Now the Euro is in trouble. Greece’s dire fiscal problems have roiled the global markets as we mentioned in last week’s update.  Many investors are wondering how they can profit from the Euro’s decline. Experienced currency traders use a forex account and short the currency directly, but there are other options. ETFs have made currency investing available to retail investors. One way to play the Euro bear is UltraShort Euro ProShares ETF (EUO).

EUO is a leveraged play on the Dollar/Euro currency rate and therefore an inverse leveraged play on the Euro/Dollar exchange rate. This ETF attempts to provide twice the daily inverse performance of the Euro against the greenback. If the Euro stays in the crosshairs of so many bearish traders, EUO could generate nice returns in a short time.

A falling Euro seems like a good fundamental bet at this point. In mid-January EUO broke above short-term resistance and has since climbed nearly 10%. There’s a reason. Greece and other countries are having trouble servicing enormous public debts and may have to default. Yes, Greece is a relatively small economy, dwarfed in size by California, Texas and New York City. But the numbers are still big enough to create big problems.

Let’s assume for a minute that somehow Greece is bailed out, a prospect that appears murky at best. Yes, that might mean some short-term pain for EUO, but several other members of the Eurozone have equally dubious fiscal pictures. Portugal, Ireland, and Spain pose similar problems. Smaller countries that use the Euro like Slovenia and Slovakia, add risk to the common currency. The Euro’s bullish prospects going forward are scant.

Plenty of potential catalysts could make EUO a rewarding intermediate-term investment. Given that the current market environment does not favor risk-taking, EUO might be the safest Euro bet to make. To profit from a struggling European currency, short the Euro with EUO.

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.

Montana-based Rightnow Technologies is a provider of customer relationship management (CRM) software, a growing niche in cloud computing. On its own, CRM is a lucrative field dominated by companies like Oracle (ORCL) and Salesforce.com (CRM), but there is still room for a smaller company like Rightnow to blossom.

Part of the allure for Rightnow is that it’s a small-cap stock, with a market cap of around $530 million. Keep in mind that small-cap stocks historically outperform their large-cap peers when the economy is coming out of a recession. The deeper the recession, the better the small-caps perform when the recession is over. Granted, not every such stock survives, but those that do come out much stronger. And we like Rightnow’s chances.

Rightnow’s growth potential was on full display earlier this month when the company reported fourth-quarter profits of $2.6 million, or eight cents a share, compared with $692,000, or two cents a share, a year earlier. Revenue was up 15% to $41.6 million. In other words, a 15% gain in sales led to a quadrupling of profits. Nice! Both the top and bottom line numbers handily beat analyst estimates. The full-year 2009 profit reversed the loss posted the prior year. The update wasn’t entirely rosy and the company has some challenges ahead, but analysts are starting to notice this company and add it to their buy lists.

Technology led the markets higher in 2009. That trend has not carried over into 2010 as of yet, and RNOW is down with the benchmarks on a year-to-date basis. Still, with earnings expected to grow another 75% by 2011, this stock sports some serious growth indicators. Is it already overpriced? Shares trade at nearly 25 times forward earnings and 13 times book value, which may seem pricy but isn’t unusual in fast-growing tech stocks. If you’re looking for a small-cap growth play in the cloud computing space, look no further than RNOW.

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.

Doing business with the government can be tough, especially when the state of the union is not what it used to be. That said, there’s no getting around the fact that Aetna is a well-run company with a dominant market position. Management is making efforts to lower costs, and those efforts are starting to show results. The research arm of Collins Stewart recently upgraded AET from SELL to HOLD. We think it’s closer to a BUY. Here are a couple of reasons.

For one, Aetna’s shares have held up relatively well in the face of lower 2010 guidance. Standard & Poor’s expects Aetna to earn $2.60 a share this year and has a $33 price target on the stock. This represents a decent premium from where the shares currently trade. It’s also worth noting that Aetna said its employer healthcare plans will spend less this year on medical costs, a key metric watched by Wall Street analysts.

Second, when the company reported earnings last Friday, AET options volume was heavily tilted to the call side. The ratio of calls to puts rose to 56%, higher that it has been in a year. This may indicate an increasing bullish bias toward Aetna.

Finally, some investors overlook Aetna’s international business. The company’s Global Benefits unit is exploring growth opportunities in Africa and the Middle East. Aetna sees great opportunity outside the U.S. Global markets could be a positive catalyst for Aetna shareholders going forward.

Health insurers do have some near-term headwinds, but the solid long-term outlook for Aetna makes it a compelling opportunity for astute investors. In addition, the stock may have found support near $28. If you’re looking for a solid, too-big-to-fail healthcare stock that can profit whether or not health care reform passes, go with AET.

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.

Take two ETFs designed to track the S&P 500. SPDR S&P 500 Index ETF (SPY) has an expense ratio of 0.09% as does its lesser known rival, the iShares S&P 500 Index ETF (IVV). SPY, the original ETF, is more widely held than IVV. In fact, SPY is bigger than any other ETF in the world having at more than $70 billion. SPY is also very liquid, trading nearly 165 million shares on an average day.

IVV, on the other hand, has “only” $21.2 billion in assets and trades “only” 3.95 million shares per day. It’s big and active, but SPY is even more so. So one might prefer to invest in SPY, right? Not so fast. In news that is likely to have long-term ramifications on the ETF industry, brokerage giant Fidelity announced commission-free trading for 25 iShares ETFs. IVV is one of those ETFs. SPY is not.

Commission-free ETF trading was pioneered by Schwab for its own proprietary ETFs. Fidelity’s move is a response to competitive pressure – and a good one, since iShares is one of the largest ETF issuers in the world. Plus, the 25 iShares ETFs (including IVV) that Fidelity is offering commission-free gives investors many more choices than at Schwab.

Many of Fidelity’s 12 million retail customers could see a big reduction in their trading expenses as a result of this change. The cost-savings could make the choice between IVV and SPY very easy for many investors. The impact of the Fidelity announcement was immediately visible during Tuesday’s trading session. Shares of Fidelity rivals such as Schwab (SCHW), TD Ameritrade (AMTD) and E*Trade (ETFC) all traded lower on the news.

While a brokerage price war doesn’t testify to the future performance of any particular ETF, this move by Fidelity does make choosing between two S&P 500 ETFs that much easier. If you have an account at Fidelity and want to buy the S&P 500, use the commission-free choice: IVV.

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. Our affiliate, Capital Cities Asset Management, uses Fidelity Brokerage Services and Ameritrade Institutional as custodians and brokerage for client accounts.

U.S. Treasuries have historically been a safe and popular alternative for cash holdings. However, yields on these investments have plunged as the Federal Reserve injects vast amounts of liquidity into the economy. Short-term money market accounts are not much better. You should consider yourself lucky if you are getting 1%.

Nonetheless, smart investors always keep some cash on hand. This week’s pick is an ETF issued by bond giant PIMCO for this very purpose. PIMCO is one of the world’s largest bond mutual fund managers. The firm recently entered the ETF game, and one of its offerings may appeal to cash investors: PIMCO Enhanced Short Maturity Strategy Fund (MINT). MINT is barely three months old but has already amassed more than $59 million in assets and trades more than 200,000 shares on an average day. These are impressive figures for any new ETF, much less one that is not very exciting. MINT is an actively traded ETF, which so far haven’t attracted much investor interest. PIMCO seems to have overcome that obstacle with this ETF.

MINT is a possible alternative to money market funds for many investors. The ETF holds only investment-grade short-term fixed income instruments – no riskier fare like emerging markets bonds or high-yielding corporate bonds. MINT has about 400 different holdings, fully disclosed to investors every day. MINT does not use options, futures, or swaps to help generate returns, another aspect that may appeal to more conservative investors. All of MINT’s holdings are denominated in U.S. dollars. Investors should keep in mind the 0.35% expense ratio.

MINT is certainly not as glamorous as many ETFs. Nearly half of its assets reside in investment-grade credit securities and another 36% is in government debt. The remainder is allocated to mortgage securities. Given the short maturity of its holdings, MINT should effectively reduce volatility for investors seeking to enhance the return on their cash while keeping risk minimized. MINT is currently trading just over its issue price of $100 at $100.27 – exactly where it should be. To go with a stable cash equivalent not tied to long-term CDs, buy PIMCO’s MINT.

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.

Recent years, however, have not been kind to Dell. The stock is down about 60% in the last five years. Founder Michael Dell returned to leadership in a move many thought would be an elixir for a lost company. The longer-term picture was soon discovered to be just as dour as previously thought. Consequently, Dell’s stock has been languishing.

Large tech companies often transform from growth to value stocks as their businesses mature. Investors understand why Dell has been left in the dust by the likes of Apple (AAPL). What investors won’t tolerate is the fact that mature tech names like Intel (INTC) and Microsoft (MSFT) ended at or above where they were five years ago while Dell has lost more than half its value. At Hewlett-Packard (HPQ), Dell’s chief rival, shares have more than doubled.

But things may be changing. The most recent news is encouraging for the once high-flying Dell. Dell is redirecting its creative energy outside the plain-vanilla PC business. They recently purchased Perot Systems for $3.9 billion in a bid to generate more consulting and services revenue. In addition, Dell showcased a tablet PC prototype earlier this month. The company can bankroll such projects with more than $13 billion in cash. Bottom line, Dell is looking for more in technology and has the means to back their ambition.

Dell stock has climbed more than 10% since early December. Look for even more upside if Dell breaks above $15.25. There may be room to capture a 2-3 point move as it transitions into the previous trading range. For a short term gain in a solid stock, go with DELL. For a longer-term value play in tech, go with cash-rich but still growth-minded DELL.

Disclosure covering writer, editor, publisher, and affiliates: long AAPL. No positions in any of the 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.

Arguably no sector’s fortune is as tied to the economic climate as transportation. If you’re a fan of technical analysis, you know that the Dow Theory states that moves in the transports index usually portends a similar move in the more widely followed Industrials Average. Investors need to watch transportation stocks.

We recently highlighted two of the biggest names in the shipping space: FedEx (FDX) and UPS (UPS). Investors who want exposure to the sector at large may want to consider the iShares Dow Jones Transportation Average ETF (IYT). IYT tracks the aforementioned 20-stock Dow Jones Transportation Average, which includes FedEx, UPS, the four largest U.S. railroad operators, and several trucking firms.

These are companies, that common sense would argue, have an unparalleled correlation to the U.S. economy. They ship nearly everything you can think of. FedEx and UPS perform well when businesses are sending more packages across the U.S. or the world. Railroad operators like CSX (CSX) and Union Pacific (UNP) move everything from cars to coal. When shipping volumes are high, you can bet the broader economy is performing well.

In fact, IYT’s exposure to the rail operators alone may be a good reason to take a look at the ETF. Warren Buffet is making a significant bet on the future of the U.S. economy with his $34 billion purchase of Burlington Northern Santa Fe (BNI). IYT provides exposure to the entire sector and can save you hours of research.

On a technical basis, IYT is starting to look attractive. This week the shares hit a new 52-week high at $76.69. Even if the market undergoes a small correction, IYT should find support at $73 (its December breakout and near the 50-day moving average). A retreat to that price may be a buying opportunity.

Either way, investors will want to watch IYT for hints about where stocks are headed in 2010. It could be your ticket to riding the wave up the charts. To buy into a potential recovery before it happens, go with IYT.

Disclosure covering writer, editor, publisher, and affiliates: long AAPL. No positions in any of the 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.

On the other hand, you can’t ignore commodity futures completely. Some stocks are directly tied to commodities they produce or process. For instance, American Italian Pasta Company (AIPC) could be affected if wheat moves sharply up or down. Sugar is another member of the commodities family. Like all commodities, sugar prices are affected by the worldwide supply and demand of sugar. When there’s a glut of sugar, prices fall. When sugar crops are threatened or supply is tight, sugar futures rise. That’s what is happening now.

Worldwide sugar prices are rising for two reasons: rising ethanol consumption and harvest problems. Most of the world’s sugar is made from sugar cane in tropical zones. Major producers include Brazil, India, China, Mexico, and Thailand. Brazil is the largest sugar producer and exports 30 million tons, or 20%, of global sugar production. Brazilian sugar exports include regular table sugar and ethanol. As alternative fuel interest continues to expand, so does demand for sugar-based ethanol.

Others have picked up on the underlying demand for sugar. Agribusiness player Bunge (BG) recently bet on rising Brazilian sugar by purchasing a local producer called Moema. It was Bunge’s largest sugar cane purchase to date. The Indian government recently acknowledged rising sugar prices by asking factories and millers to share profits with farmers. Whether or not sugar socialism will be imposed on the Indian subcontinent will be determined at a later date. For now, the market is just readjusting to a rising commodity. So is this week’s pick: the Brazilian ethanol and sugar producer Cosan Limited (CZZ).

Cosan produces, distributes and exports ethanol and sugar. The São Paulo-based manufacturer is diversified in both hydrated ethanol and industrial ethanol. In addition, they produce different sugars like crystal sugar, organic sugar, refined sugar and altered sugar. Cosan also deals with combustible alcohol and sugar-cane cultivation. Sugar and ethanol exports head from Brazil to the US, Japan, and Europe.

With a market cap around $3.5 billion, Cosan is not a small company. Revenues run around $3.77 billion. Granted, their diluted earnings per share is running -$0.76. However, rising sugar prices are a boon to the stock price. JP Morgan recently upgraded CZZ to “overweight”. CZZ recently broke out of congestion, moving up $1 to around $9 per share following rising global sugar prices. To go with rising sugar prices in the sugar export capital of the world, buy CZZ.

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.