The polls are in. The WNA Nuclear Energy Index is a clear winner over the S&P 500. Well, let's quantify that; the S&P 500's 5-year annualized return is 11%, the "back-tested" WNA Nuclear Energy Index returned 33% annualized over the past 5-years. It's fair to say the nuclear index holds a decisive edge. Of course, past performance notwithstanding, the nuclear industry appears poised for stronger momentum in the years to come as nuclear build-out starts to gain traction. Using the last nuclear build-out cycle as an example, a safe assumption would indicate an expansion cycle that may last as long as 15 years. This type of data makes PowerShares' Global Nuclear Energy Portfolio ETF (PKN), which tracks the WNA index, quite attractive as a long-tern investment.

On May 6, PolyOne Corp. (POL), the leader in North America and Europe for polymer compounds and polymer coating systems, reported 2008 1st quarter earnings (see conference call transcript). EPS came in at 7 cents per share vs. 8 cents per share for the same quarter last year. This caused a 43-cent drop (6%) in the stock.

Collective Brands (NYSE: PSS) CEO Matt Rubel responded to last week's unfavorable federal court ruling in which the company was found guilty of trademark infringement and ordered to pay $305M in damages to adidas AG. In a letter to shareholders, Rubel discussed why he believes that the jury's ruling was "unjustified and excessive," and disclosed that the company will file motions asking the court to set aside the verdict, enter a judgment in its favor, order a new trial, or greatly reduce the jury's award.

• The total award of $305M (including $137M of Payless profits and $137M in punitive damages) is ten times the amount of actual damages found ($30.6M) and exceeds the profits that Payless ShoeSource made on its two- and four-stripe shoe styles by 15 times. Though our scope of patent and trademark infringement case is limited, we don't ever recall seeing a jury award of this magnitude.
• If the decision stands as ruled, it may also give adidas exclusive rights to all two- and four-stripe footwear designs. Payless is by no means the only footwear retailer with a private label that resembles adidas' three-stripe design (look around the footwear department at any mass merchant retailer). A ruling like this could potentially give adidas a monopoly on all striped shoe styles, which would have grave consequences across the industry as a whole.

Disclosure: No positions

One of the reason smallcaps can be so lucrative is that they receive very little media or analyst coverage. Unfortunately, it can also be why you can suffer horrific losses when you do not know the reasons behind the price movements in your stock.

The oil and gas story is alive and well and looks to be into the foreseeable future. San Juan Basin Royalty Trust (SJT) looks very well positioned on the higher moving price of natural gas, but has experienced some negativity as recent costs have been higher than expected, cutting into earnings and the last few distributions. Looking forward, this trust looks to have capacity for the next ten years, as they have resources of over 50 trillion cubic feet.

Year over year we have seen oil and gas production decrease 10%, but with realized oil prices doubling last year this coming quarter could be very good for earnings. If we look at average price attained last year gas was $6.11 per Mcf, and oil $63 per barrel. Last year saw a decrease in the collected price of natural gas and that was the main contributor to negativity with respect to earnings. Capital expenditures have also been a problem as 2006 was very large and there wasn't enough of a decrease for last year. I believe we will see these expenditures come down this year more in line with 2005 numbers. The trust estimates capital expenditures will decrease by $5 million for this year.