Revenue rose 7.7% in 2012, to a record $4.1 billion from $3.8 billion. If you exclude contributions from acquisitions, revenue still rose 6.1%.

The company continues to see rising demand for the uniforms and services, such as document shredding, that it sells to businesses. It is also doing a good job of controlling its costs.

Even with the U.S. economy’s uncertain outlook, Cintas expects its earnings to rise to $2.53 a share in fiscal 2013. The stock trades at a reasonable 15.0 times that forecast.

Cintas is a buy.

MACY’S INC. $35 (New York symbol M, Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 413.2 million; Market cap: $14.6 billion; Price-to-sales ratio: 0.5; Dividend yield: 2.3%; TSINetwork Rating: Average; www.macysinc.com) reported lower-than-expected sales at its 840 department stores for June 2012.

During the month, same-store sales rose 1.2% from June 2011. That missed the consensus estimate of a 1.9% increase. The weaker U.S. economy has hurt consumer spending. As well, renovations have cut sales at its flagship store in New York City.

However, the company’s websites continue to grow strongly: online sales jumped 31.8% in June 2012. Moreover, Macy’s still expects its same-store sales to rise 3.7% for its full fiscal year, which ends January 31, 2013.

Macy’s is a buy.

CEDAR FAIR L.P. $32 (New York symbol FUN; Income Portfolio, Consumer sector; Units outstanding: 55.5 million; Market cap: $1.8 billion; Price-to-sales ratio: 1.7; Dividend yield: 5.0%; TSINetwork Rating: Average; www.cedarfair.com) reported revenue of $456 million from the beginning of the year through the July 4th holiday weekend. That’s up 4.6%, from the same period in 2011.

New rides and attractions are helping Cedar Fair draw more visitors to its 11 amusement parks and seven water parks. Overall attendance rose 2%, while average spending per guest gained 4%. Revenue at its five hotels also rose 2%.

Cedar Fair is a buy.

U.S. Thanksgiving Day features the famous Macy’s parade in New York. It also marks the beginning of the Christmas season, the most important sales period for the big department stores. We assess how Macy’s investment in a major merchandising plan may affect its stock market investment prospects for the holiday season and beyond.

MACY’S INC. (New York symbol M; www.macysinc.com) operates 810 Macy’s and 41 Bloomingdale’s department stores in 45 states.

The company continues to benefit from its “My Macy’s” plan to tailor its merchandise to local tastes. This strategy has increased customer traffic in its stores and encouraged repeat visits. As well, the company recently settled some outstanding tax disputes; that lowered its overall tax bill.

Macy’s now plans to spend $400 million over the next four years on a major upgrade to its flagship department store at Herald Square in New York City.

This project will increase the store’s selling space by 8%. That will give it more room for popular merchandise, such as shoes, handbags and cosmetics. Work will begin in early 2012, and will continue through 2015. The company will complete the project in phases so the store can remain open during these renovations.

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Stock market investment: Macy expects same-store sales to rise

Macy’s sound balance sheet will let it keep expanding. It holds cash of $1.1 billion, or $2.61 a share. Its long-term debt of $6.2 billion is a manageable 49% of its market cap.

The company expects its full-year same-store sales to rise by 4.8% to 5.0%. As well, it now expects to earn $2.70 to $2.75 a share in fiscal 2012, up from its earlier range of $2.60 to $2.65 a share. The stock trades at 11.0 times the midpoint of the new range. The $0.40 dividend yields 1.3%.

In the December edition of Wall Street Stock Forecaster, we look at how Macy’s big spending plans are likely to pay off. We also discuss the state of retail spending in the U.S. and how it’s likely to affect the company as it seeks to build up its brands and its online business. We then conclude with our clear buy/sell/hold on Macy’s. The company is just one of 21 stocks we analyze in this issue of our Wall Street Stock Forecaster.

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We analyze Macy’s in Wall Street Stock Forecaster, our newsletter that gives you stock market news and advice on U.S. stocks.

In the three months ended July 30, 2011, Macy’s earnings rose 63.9%, to $241 million from $147 million a year earlier. Earnings per share rose 57.1%, to $0.55 from $0.35, on more shares outstanding. That was well ahead of the consensus estimate of $0.48 a share.

Sales rose 7.3%, to $5.9 billion from $5.5 billion. That beat the consensus sales estimate of $5.8 billion. Same-store sales rose 6.4%. The company continues to benefit from its plan to tailor its merchandise to local tastes. Its private-label products are also selling well. In addition, Macy’s has been improving its customer service. That helps build customer loyalty.

The company expects its full-year same-store sales to rise by 4.8% to 5.1%. That’s up from its prediction of 3% at the start of the year. As well, Macy’s now feels it will earn $2.60 to $2.65 a share in fiscal 2012, up from its initial range of $2.25 to $2.30 a share.

We updated our advice on Macy’s in our August 12, 2011, Wall Street Stock Forecaster hotline, which you can immediately view when you take a 1-month free trial to Wall Street Stock Forecaster. Click here to learn how you can start profiting from Wall Street Stock Forecaster’s stock market news and advice right away.

(Note: If you are a current Wall Street Stock Forecaster subscriber, please click here to view Pat’s recommendation. Be sure to log in first.)

Macy’s is one of the companies we cover in Wall Street Stock Forecaster, our newsletter for U.S. stock market investing.

In its 2012 first quarter, which ended April 30, 2011, the company’s earnings jumped 233.3%, to $0.30 a share from $0.09 a year earlier. That easily beat the consensus earnings estimate of $0.18 a share.

Sales rose 5.7% in the quarter, to $5.9 billion from $5.6 billion. Same-store sales rose 5.4%. The company continues to benefit from its efforts to tailor its merchandise to local tastes, as well as strong demand for its private-label products.

Macy’s is a dividend paying stock. The strong results prompted the company to double its quarterly dividend, to $0.10 a share from $0.05. The new annual rate of $0.40 yields 1.4%.

We updated our stock market investing advice on Macy’s in our May 13, 2011 Wall Street Stock Forecaster hotline, which you can immediately view when you take a 1-month free trial to Wall Street Stock Forecaster. Click here to get started right away.

(Note: If you are a current Wall Street Stock Forecaster subscriber, please click here to view Pat’s recommendation. Be sure to log in first.)

Macy’s is one of the U.S. stock market investments we analyze in our Wall Street Stock Forecaster newsletter.

Macy’s makes a point of tailoring its lines to regional tastes. It also emphasizes its exclusive brands, which account for 43% of its sales.

In fiscal 2011, which ended January 29, 2011, Macy’s sales rose 6.4%, to $25.0 billion from $23.5 billion in 2009.

Same-store sales rose 4.6%. That was the company’s best performance in 15 years, and was far ahead of the 2% rise the company was expecting. Higher sales of men’s and women’s clothing and accessories were the main reasons for the higher sales. As well, online sales rose 28.7%.

Macy’s earnings per share jumped 55.1%, to $2.11 from $1.36. Macy’s continues to do a good job of controlling its costs and managing its inventories. That cuts the need for costly clearance sales.

The stock pays a quarterly dividend of $0.05. The annual rate of $0.20 yields 0.8%.

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It’s hard to set up any company that grows into a profitable business. It’s even harder to profit in pioneering fields like those that green stocks generally focus on. But it’s relatively easy to launch a stock promotion that purports to have answers to social problems, or ways to profit from emerging green technology. That’s why stock promotions, of green stocks or anything else, are always more common than legitimate start-ups. Still, even the legit start-ups mostly wind up going broke.

Green stocks should never make up more than a modest part of your portfolio. Our view is that if you want to invest so that you make money and help the environment, your best bet is to build a portfolio of well-established companies, spread out across the five main economic sectors. Then, donate some of your profits to worthwhile socially conscious organizations.

Here are a couple of examples of green stocks and their risks:

Ethanol:

Ethanol fuels produce less greenhouse gas emissions than gasoline. Ethanol is made from plants, which absorb carbon dioxide during their growth. On a full fuel cycle (i.e. from plant growth to use of the fuel in a vehicle), a 10% ethanol-gasoline blend is estimated to reduce greenhouse gas emissions by up to 4% if the ethanol is made from grains, and up to 8% if it is made from cellulosic biomass.

“What works in Canada is working in the U.S.” That’s what Mr. Peter Brimelow of Dow Jones MarketWatch recently wrote about Wall Street Stock Forecaster, one of a group of “remarkable Canadian newsletters” that have “assembled a long and very strong record.” The record, as compiled by the authoritative Hulbert Financial Digest, shows that the compound annual return of Wall Street Stock Forecaster has beaten the Wilshire 5000 Total Market Index by almost 30% over the past decade. You are not getting the full potential out of your investments if you do not include a selection of the best U.S. stocks in your portfolio. And the results show that Wall Street Stock Forecaster uncovers the American stocks with the greatest growth potential. As a new investor, you can get the first month FREE plus you will start profiting from our weekly hotline updates and recommendations immediately. Reply now. Click here.

Ethanol as fuel has a lot of conceptual appeal, especially with investor interest rising for lower-polluting energy sources. However, many companies focusing on ethanol will have difficulty showing profits for a number of years. Several new ethanol plants will open in the next few years, which could lead to oversupply and lower prices. Falling oil prices could also undercut ethanol’s appeal.

Wind power:

Wind power is a clean and renewable source of power, but it still draws objections from environmental groups. As well, it has encountered a number of technical problems

One key problem with wind power is that it generates fluctuating power output, due to the variability of wind speed. But wind speed also changes from day to night, and there are seasonal and even annual changes in wind strength. This variability means that utilities must maintain back-up power capacity or costly storage, equal to their reliance on wind power.

Large numbers of wind turbines on a “wind farm” take up a lot of space. In some cases, the space between the wind turbines can be used for agriculture. However, a wind farm dominates the visual landscape and is unacceptable in tourist areas or nature preserves.

If the wind turbines are located in populated areas, noise from turning blades can spark public opposition that makes it difficult to win regulatory approval. The obvious solution is to locate the turbines in remote locations. But that requires a bigger investment in long-distance transmission lines.

Risking a large amount of capital for a technology that still is considered new and unproven makes it necessary in most cases to rely on government subsidies to attract investors. Removal of these subsidies would make most wind power companies unprofitable.

When we recommend a stock as a buy, we first look to see if it meets these value-investing criteria. And a key component of our value-investing system is our ratings system, which identifies stocks with positive prospects and lower risk.

We have six Successful Investor ratings. The top rating is Highest Quality; next is Above Average; next is Average; below that, Extra Risk; below that, Speculative; and, at the bottom of the scale, our riskiest, lowest-quality rating of Start-Up.

We base our Successful Investor ratings on a system we’ve developed over the years. We use it to assign “quality points” based on nine key factors that successful investors use in value investing to determine a company’s ability to survive a business setback and go on to greater success when conditions improve.

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These nine Successful Investor factors and the points they earn are:

• One point for a long-term record of profit.
• One point for a long-term record of dividends.
• One point for industry prominence — two points for industry dominance.
• One point for an attractive balance sheet, with adequate equity and working capital, and manageable debt.
• One point for Canada or U.S.-wide operations, or two points for multinational operations. You may want to invest in firms that are concentrated geographically, but geographical diversification cuts risk.
• One point for being able to serve the needs of all shareholders. To merit this point, firms must be free of excess government regulation, free of too much dependence on a single supplier and free of insider abuses.
• One point for freedom from business cycles.
• One point for the ability to profit from a secular trend, or two points for the ability to profit from two or more secular trends. Secular trends (such as the global move toward economic liberalization and free trade) go far beyond mere business cycles; they reflect ongoing changes in the world.
• One point for offering products or services that profit from habitual behaviour.

Here’s how we then assign Successful Investor value-investing ratings:

Companies with 11 or 12 points fall in the top Successful Investor rating category: Highest Quality. Those with eight to 10 points are Above Average. Six or seven points mean they are of Average quality. If a stock has just four or five points, it carries Extra Risk (that is, more risk than average); two to three points, Speculative; one or no points, Start-Up.

Unlike computerized risk assessments, our Successful Investor value-investing ratings demand many judgment calls. But we find Successful Investor value-investing gives us a deep-seated measure that goes to the heart of a company’s staying power and yields few unfortunate surprises.

Although publicly traded wind companies are considered green stocks, wind power does draw some objections from environmental groups. It also faces some challenging technical problems.

Concept has appeal, but wind power is imperfect

One of the key problems with wind power is that varying wind speeds cause its electricity output to fluctuate. In many areas, the wind is stronger in the daytime, when demand is lower, and dies down in the evening, when consumers use more appliances. Also, electrical power can’t be stored efficiently, so to make economic sense, it must be used when it is produced. As a result, it can’t supply all electricity needs, and utilities must maintain back-up power capacity or costly storage that is equal to their reliance on wind power.

One way for wind power stocks to overcome some of these problems is to have a large number of wind turbines operating at the same time. But this raises another problem: although the space between the wind turbines can be used for agriculture, a wind farm dominates the landscape, making it unsuitable for tourist areas or nature reserves.

“What works in Canada is working in the U.S.” That’s what Mr. Peter Brimelow of Dow Jones MarketWatch recently wrote about Wall Street Stock Forecaster, one of a group of “remarkable Canadian newsletters” that have “assembled a long and very strong record.” The record, as compiled by the authoritative Hulbert Financial Digest, shows that the compound annual return of Wall Street Stock Forecaster has beaten the Wilshire 5000 Total Market Index by almost 30% over the past decade. You are not getting the full potential out of your investments if you do not include a selection of the best U.S. stocks in your portfolio. And the results show that Wall Street Stock Forecaster uncovers the American stocks with the greatest growth potential. As a new investor, you can get the first month FREE plus you will start profiting from our weekly hotline updates and recommendations immediately. Reply now. Click here.

Further, if wind turbines are located in populated areas, citizens may protest about noise from turning blades, making it difficult to win regulatory approval. The obvious solution is to locate the turbines in remote locations, but this involves a larger investment in transmission lines. Many citizens will not accept transmission lines on or near their properties, which may mean more regulatory approval is needed, this time for the lines, adding further costs to new wind-power projects.

On top of that, many environmentalists believe wind turbines kill birds. For efficiency, wind farms must be located where the wind blows fairly constantly, but these locations are often on migration routes.

High construction costs are another difficulty wind power stocks face. These include the cost of the turbines themselves, plus buying or leasing the necessary land. Installation can also be expensive, depending on the terrain and distance from the power grid.

Technological improvements and larger turbines are driving down costs. And, if wind power is kept to a small proportion of the total power grid, but widely dispersed, it can be more readily absorbed into electrical-power systems. Moreover, if oil and natural gas prices rise again, wind power would become more attractive.

Wind power has the potential to become more profitable, but investors should choose companies based on their performance, rather than for ideological reasons, as not all wind power stocks will profit equally. Today’s wind power operations depend on government subsidies, and that’s always a risky situation.

Because of that, while drug stocks can show fantastic profits, it might be more appropriate to value drug makers the way you value companies that are trying to bring new mineral discoveries into mines: at 10 times earnings or less.

Drug buyers have no brand loyalty; when a better drug comes along, use of the old standby collapses overnight. Drug companies must invest large sums to bring new drugs to market, and there is great risk that their drugs will fail to clear all the necessary hurdles. If a drug does fail, it can leave the developer with a return of zero.

In addition, if they pass all of the hurdles, drug makers face the peril of generic drug makers, who can duplicate drugs after the trademark period without putting in the original research-and-development expenses.

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We’ve often warned that drug stocks are riskier than investors realize. The cost of developing a new drug is huge, and the payoff, if any, is uncertain. As well, if investors come around to common-sense views, like the best treatment for diabetes is a combination of improved diet, more exercise and fewer calories, they may lose their appetite for the higher risks and costs of drug stocks.

While pure drug stocks are quite risky, the fields of medicine and health care offer a number of options that we recommend. We prefer health-care stocks with recurring revenue, which can come from the sales of lab supplies, maintenance on equipment or other sources. We feel that these revenue streams are safer from the sorts of risks faced by drug companies.

One example of such a stock is:

BECKMAN COULTER INC. (New York symbol BEC; WSSF Rating: Average), which makes lab equipment that doctors and medical researchers use to detect substances in bodily fluids.

Demand for Beckman’s automated systems remains strong among hospitals and clinics. This demand has offset lower sales to university labs caused by lower government funding. Hospitals prefer Beckman’s systems, since they require little human interaction. That helps cut their costs. Accurate detection of diseases also reduces the length of hospital stays for patients.

No matter how widely or narrowly you cast your information net, some of your investments will disappoint you. But that won’t matter if you apply these three tips. That’s because your near-inevitable gains will overwhelm your all-but-unavoidable losses.

Successful Investor Investing for beginners Tip #1: Hold mostly high-quality, dividend paying stocks or mutual funds that hold those stocks

We think investors will profit most — and with the least risk — by buying shares of well-established companies with strong business prospects. These are companies that have strong positions in a healthy industry. They also have strong management that will make the right moves to remain competitive in a changing marketplace.

A long-term record of dividends provides a measure of safety for investors. Dividends, after all, are much more stable than earnings. More important, dividends are impossible to fake — either the company has the cash to pay dividends or it doesn’t.

That’s not to say that there won’t be surprises that affect every company in a particular industry. But well-established stocks have the asset size and the financial clout — including solid balance sheets and strong cash flow — to weather market downturns or changing industry conditions.

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Successful Investor Investing for beginners Tip #2: Keep your portfolio well-balanced among the five economic sectors

Remember to spread your portfolio out across the five main economic sectors: Resources; Manufacturing; Finance; Utilities; and Consumer. That way, you avoid overloading yourself with stocks that are about to slump simply because of industry conditions or changes in investor fashion.

By diversifying across the sectors, you also increase your chances of stumbling upon a market superstar — a stock that does two to three or more times better than the market average. These stocks come along every year. By nature, their appearance is unpredictable; if you could routinely spot them ahead of time, you’d quickly acquire a large proportion of all the money in the world, and as we mentioned earlier, nobody ever does that.

Successful Investor Investing for beginners Tip #3: Downplay or avoid stocks in the broker/media limelight

That’s because these stocks tend to develop exaggerated investor expectations – especially those of inexperienced investors. When these stocks fail to live up to those expectations, declines can be steep. Broker and media attention tends to build investor optimism and push these stocks up to relatively high prices. If the market weakens or if they run into internal difficulties, these stocks can drop sharply, so it’s a good idea to limit your exposure to them.

Successful Investor Investing for beginners Tip #4: Focusing on including stocks with hidden or little-noticed assets

These are assets that are easy to overlook, since their full value rarely appears on a company’s financial statements.

These assets include long-time real estate holdings that are worth much more than the balance-sheet value. Under-used brand names are another good example. Another key hidden asset — is research spending. Companies write off their research outlays in the year in which they spend the money, but benefits (if any) such as new or better products may only materialize years in the future.