SmartMoney

9 Stock Bargains From Europe

European stocks have gotten significantly cheaper than American ones. The Stoxx Europe 600 index trades at 10.4 times projected earnings, versus 13 times for the S&P 500 index.

Lower prices mean plump dividend yields. The European index pays around 4% at the moment, versus 2.1% for the U.S. one.

Of course, Europe’s stocks are cheap for good reasons, including a fiscal crisis, political turmoil and the threat of a currency shake-up and bank losses.

Social Gaming’s Biggest Competitor: Boredom

Zynga paid $183 million for the maker of the social game “Draw Something,” only to see its huge popularity plummet in just weeks – a misstep experts say is a testament to fickle online tastes.

“Draw Something” – a sort of virtual Pictionary in which users post doodles on Twitter and Facebook – fell out of favor faster than many pop songs.  Zynga purchased Omgpop, the company that created the game, in March. It scored 50 million downloads in its first 50 days. But the game’s monthly average usage  dropped by 1.6 million players in the last seven days, according to the most recent figures from AppData.com. (Zynga did not respond to requests for comment.) “Game apps have a questionable lifecycle,” says Rick Summer, an analyst at Morningstar.

Facebook Lawsuit (Like IPO) May Disappoint Investors

Even if the Facebook shareholders suing the social network and its underwriters over the handling of the initial public offering win a settlement, history suggests the payout could be small.

Three investors filed a civil lawsuit in Manhattan federal court Wednesday alleging that the site and the banks handling the deal failed to disclose crucial information prior to the IPO. At issue are changes analysts at underwriters Morgan Stanley and other banks including Goldman Sachs made (but didn’t share) that downgraded their forecasts for Facebook’s revenue growth. The plaintiffs — who are seeking class-action status — could get a payout if they can demonstrate misstatements or omissions in the company’s offering documents, says Charles Whitehead, professor of law at Cornell University’s Law School, and a former Wall Street attorney. “If it’s a plausible claim, this is very likely to get settled,” he says.

McMansions Fuel New Home Sales

The rise in new home sales is being driven in part by demand for the kind of larger and more luxurious custom-built houses that had fallen out of favor in recent years: so-called McMansions.

Data released on Wednesday shows that sales of newly built homes rose 3.3% in April from a month prior and 9.9% from a year ago. While the figures do not disclose the size of these new homes, home builders credited the McMansion side of the spectrum. That’s a reversal from recent trends: During the recession the size of homes got smaller, shrinking 3.4% to 2,382 square feet, according to the US Census. But last year that size jumped 5.2% to 2,505 – the largest in at least four years. In many regions of the country, homes are even larger.

Can New Rules Curb Prepaid Card Fees?

If federal regulators limit the charges levied on pre-paid debit card users, banking officials say the industry will likely just invent new fees.

The Consumer Financial Protection Bureau Wednesday announced plans to develop new protections for the prepaid cards, which allow those who don’t have bank accounts to make purchases or ATM withdrawals. The agency says the regulations would aim to rein in fees and by making them more transparent and help consumers to recover stolen funds. “Prepaid cards have far fewer regulatory protections than bank accounts or debit or credit card,” says CFPB director Richard Cordray said in a statement.

Where Best Buy Beats Amazon

Best Buy continues to lose ground to Amazon and other online retailers, experts say, even though the big-box chain sometimes boasts better prices.

The company reported a 25% drop in earnings last quarter Tuesday, noting particularly weak sales of notebooks, gaming products, cameras and televisions. Interim CEO G. Mike Mikan says Best Buy can combat showrooming – when shoppers peruse at the store and then buy online — by upgrading its stores. “I know there are skeptics out there, I see the share price,” he told an investor conference call. “But I am confident we will prove the skeptics wrong.”

Stock Trek: How to Invest in Outer Space

The launch of the first private spacecraft bound for the international space station on Tuesday heralds a new era of space exploration, funded by the likes of movie director James Cameron and Microsoft co-founder Paul Allen.

But financial advisers point out that you don’t need to be a billionaire to invest in outer space. While private venture firms that back space travel are typically restricted to the super-wealthy, several exchange-traded funds invest in aerospace and defense companies – the same firms likely to be involved in creating the technology and equipment necessary to explore the final frontier. For example, both the $100 million iShares Dow Jones US Aerospace & Defense fund (ITA) and the $51 million Powershares Aerospace & Defense fund (PPA) list Boeing (BA) and Lockheed Martin (LMT), two aerospace companies responsible for much of the world’s rocket production, among their top holdings. These funds allow investors to get some exposure to industrial and aviation focused companies, while also spreading their bets across dozens of companies that contribute to the technology and equipment used for space travel. “For the average investor I would look at who’s providing the technology, who is providing the maintenance and the fuel,” says David Blain, a financial adviser based in New Bern, N.C.

The Return of the Seller’s Market

Is the worst over for homeowners? Data released Tuesday shows that existing-home sales increased 3.4% in April from a month earlier and 10% from a year ago, with market conditions improving in many parts of the country.

But more tellingly, say experts, the inventory of unsold homes dropped 21% from a year ago. According to the National Association of Realtors, there is now a 6.6-month supply of existing homes, the estimated amount of time it will take for all listed homes to sell. That’s down from 9.1 months a year ago, and closer to what experts consider a seller’s market — five months or less. “It’s the most significant development in the last three months — supply has gone way down and it’s starting to put upward pressure on prices in many areas,” says John Mulville, vice president at Real Estate Economics, which tracks housing.

The Hidden Costs of Public Wi-Fi

For many people, Wi-Fi costs a cup of coffee. But as five major cable operators band together to spread free Wi-Fi across the country, some experts say consumers may end up buying everything from manicures to a pair of jeans in order to get online.

The cable operators plan to create a nationwide service called “CableWi-Fi” to give customers access to each other’s wireless Internet hot spots. Existing customers of Time Warner, Comcast and Cablevision, Cox Communications and Bright House Networks will have access to over 50,000 hot spots. People will be able to access free Wi-Fi outside of their home and office, and even outside their state, says consumer advocate Edgar Dworsky. “It’s almost like saying that a movie pass you have for AMC Theaters will also be accepted at Showcase Cinemas,” he says.

3 Reasons Facebook Stock Won’t Soar

Facebook (FB) on Tuesday tumbled another 8.9% to $31 – well below last week’s $38 initial offering price. Shareholders who had bought the stock for a quick flip must now consider whether to defy all those Facebook skeptics and hold it longer.

That has worked out beautifully for anyone who has held Google (GOOG) stock since its 2004 debut. It has multiplied six-fold in price.