I grew up (and still live) in the Deep South. I’ve also been managing money for the very wealthy for nearly two decades. One of the first things I learned about wealth in this region is that a lot of it was created by forestry and timber many generations ago.  #-ad_banner-#The seemingly bottomless bowl of money that was created when someone’s great- great-grandfather managed to buy timberland when it was a dime an acre never ceases to amaze me.  So when I discovered a stock that could help investors grow their wealth like an Alabama timber baron, I… Read More

I grew up (and still live) in the Deep South. I’ve also been managing money for the very wealthy for nearly two decades. One of the first things I learned about wealth in this region is that a lot of it was created by forestry and timber many generations ago.  #-ad_banner-#The seemingly bottomless bowl of money that was created when someone’s great- great-grandfather managed to buy timberland when it was a dime an acre never ceases to amaze me.  So when I discovered a stock that could help investors grow their wealth like an Alabama timber baron, I paid attention. CatchMark Timber Trust (NYSE: CTT) is a pure-play timber REIT (real estate investment trust) that owns, harvests and manages timber. The company currently owns interests in about 320,400 acres of timberland located in Alabama, Georgia, and Texas.  CatchMark went public in January of this year and recently conducted a secondary offering using the proceeds to extinguish debt and purchase additional acreage which has increased by 36% since year end 2013. CTT data by YCharts Since its debut, CatchMark shares have chugged sideways… Read More

Believe it or not, France exports much more than soft cheeses and techno bands. Despite the worries about the stability of the European banking system, French bank stocks offer some of the best value I’ve stumbled on recently.  #-ad_banner-#While BNP Paribas (OTC: BNPZY) has grabbed headlines thanks to a $9.8 billion fine related to doing business with countries blacklisted by U.S. regulators, a cleaner name has showed up on my radar…  Credit Agricole (OTC: CRARY). While it’s true that I wrote an article titled “Why I Will Never Buy Another Bank Stock” a few months ago, the focus… Read More

Believe it or not, France exports much more than soft cheeses and techno bands. Despite the worries about the stability of the European banking system, French bank stocks offer some of the best value I’ve stumbled on recently.  #-ad_banner-#While BNP Paribas (OTC: BNPZY) has grabbed headlines thanks to a $9.8 billion fine related to doing business with countries blacklisted by U.S. regulators, a cleaner name has showed up on my radar…  Credit Agricole (OTC: CRARY). While it’s true that I wrote an article titled “Why I Will Never Buy Another Bank Stock” a few months ago, the focus was on regional banks — not global giants. There’s a big difference.  With assets of over $2 trillion, Credit Agricole comes in at #9 among the world’s largest banks — but its ADRs (American depositary receipts) have had a rough go of things over the past few years: After falling below $2 in the depths of the Greek-fueled European debt crisis, CRARY has rebounded smartly, more than tripling since mid-2012. But is it still worth buying?  Put simply, the stock has sufficient potential growth combined with an extremely pessimistic value placed on it by a shortsighted market —… Read More

For the past couple of years, investors and analysts alike have been fixated on energy production in the midsection of the United States. Technological advances have made oil and gas extraction through fracking cheap and efficient. #-ad_banner-#Apparently, everyone has forgotten about drilling for oil at the bottom of the ocean. If you didn’t know any better, you’d think that no one drills in deep water anymore, based on the stock prices of some of the better-known offshore drilling companies. These are exactly the types of investing opportunities I look for as a contrarian/value investor; the forgotten, unloved, and ignored. One… Read More

For the past couple of years, investors and analysts alike have been fixated on energy production in the midsection of the United States. Technological advances have made oil and gas extraction through fracking cheap and efficient. #-ad_banner-#Apparently, everyone has forgotten about drilling for oil at the bottom of the ocean. If you didn’t know any better, you’d think that no one drills in deep water anymore, based on the stock prices of some of the better-known offshore drilling companies. These are exactly the types of investing opportunities I look for as a contrarian/value investor; the forgotten, unloved, and ignored. One reason investors have shunned these stocks is the Deepwater Horizon incident of 2010. Billed as the worst marine oil spill in the history of the petroleum industry, the disaster claimed 11 lives, cost BP (NYSE: BP) and other parties involved over $40 billion, and made an environmental impact that will be felt for decades to come… Like I said, a great contrarian investment opportunity. One of my favorite offshore drilling stocks is Noble Corp. (NYSE: NE). Noble’s stock is off nearly 50% since its pre-financial crisis peak. Why? All offshore drilling isn’t in the Gulf of Mexico. Oil… Read More

When interpreting the tea leaves of the economy and the market, economists, money managers, analysts and most garden-variety market pundits consult the same set of widely used economic indicators.  #-ad_banner-#The S&P/Case-Shiller home price indices. Various purchasing managers’ indices. An array of employment reports.  All of these are good, tangible indicators about the health of the overall economy and the direction of the markets.  However, I’ve found a widely held stock that indicates the health of many different indicators — from commodity costs to wage inflation — and often foreshadows how the broader equity markets will behave.  I look… Read More

When interpreting the tea leaves of the economy and the market, economists, money managers, analysts and most garden-variety market pundits consult the same set of widely used economic indicators.  #-ad_banner-#The S&P/Case-Shiller home price indices. Various purchasing managers’ indices. An array of employment reports.  All of these are good, tangible indicators about the health of the overall economy and the direction of the markets.  However, I’ve found a widely held stock that indicates the health of many different indicators — from commodity costs to wage inflation — and often foreshadows how the broader equity markets will behave.  I look to the Golden Arches.  What the stock tells me is much more than how many burgers and fries Mickey D’s has sold. Including revenue from franchised outlets, McDonald’s (NYSE: MCD) boasts annual sales in excess of $30 billion, which would make the company the world’s 68th-largest economy (just ahead of Ecuador). Let’s look at the two most important components of McDonald’s business and enable it to serve 1% of the Earth’s population every single day: materials and labor. In terms of materials, McDonald’s uses 1 billion pounds of beef a year — in the U.S. alone. That’s equal to 5.5… Read More

Originally found in the ancient Greek play “The Birds” by Aristophanes, the phrase “cloud cuckoo land” refers to an unrealistically idealistic state where everything is perfect. The term was used to describe the state of stock market before the crash of 1929 by U.S. Agriculture Secretary Henry Wallace, who would later serve as vice president under Franklin D. Roosevelt. When I look at the current market conditions, I think we should be dusting off that term again. U.S. equity markets are making new highs. Yet many pundits don’t view the market as overvalued — but is it? #-ad_banner-#In… Read More

Originally found in the ancient Greek play “The Birds” by Aristophanes, the phrase “cloud cuckoo land” refers to an unrealistically idealistic state where everything is perfect. The term was used to describe the state of stock market before the crash of 1929 by U.S. Agriculture Secretary Henry Wallace, who would later serve as vice president under Franklin D. Roosevelt. When I look at the current market conditions, I think we should be dusting off that term again. U.S. equity markets are making new highs. Yet many pundits don’t view the market as overvalued — but is it? #-ad_banner-#In search of an answer, I looked at the market’s peak price-to-earnings (P/E) ratios since the early ’80s. What I found was that the average peak P/E prior to a significant market correction was 23.5. If you’ve read my work here at StreetAuthority, you’ll know I firmly believe that valuations always matter with stocks. Now is no different. This chart concerns me… but something else concerns me even more. Again, if you’re familiar with my work, you’ve found that I tend to rely on a stock’s forward P/E as an important valuation metric. The current forward P/E for the S&P 500… Read More

To say that the financial crisis changed the landscape of the banking industry would be a bit of an understatement.  #-ad_banner-#One of the biggest dangers to capitalism was the interruption of the investment flow that technological innovators require. As the banking behemoths teetered on the verge of collapse, capital market liquidity and business lending in the traditional banking channels pretty much evaporated.  Luckily, many business development companies (BDCs) stepped up to the plate. Basically, BDCs are simply pools of money that take investor money, lend it to businesses as some combination of debt and equity, and reward investors… Read More

To say that the financial crisis changed the landscape of the banking industry would be a bit of an understatement.  #-ad_banner-#One of the biggest dangers to capitalism was the interruption of the investment flow that technological innovators require. As the banking behemoths teetered on the verge of collapse, capital market liquidity and business lending in the traditional banking channels pretty much evaporated.  Luckily, many business development companies (BDCs) stepped up to the plate. Basically, BDCs are simply pools of money that take investor money, lend it to businesses as some combination of debt and equity, and reward investors based on the performance of the BDC’s investment portfolio.  Most of the companies that BDCs work with are what are referred to as mid-market companies: too big to be small, too small to be big. But many of these companies become bigger and often go public. That’s when the true value of the equity stake the BDC takes is unlocked. One of the more interesting names on my radar is Hercules Technology Growth Capital (NYSE: HTGC). With a market cap just shy of $1 billion, Hercules has set its sights on fast-growing technology and biotech businesses. As I’ve… Read More

As you might deduce from reading my work here at StreetAuthority, I’m a bit of a cheapskate.  #-ad_banner-#For example, I don’t buy new cars. I hate the idea of the instant, $5,000 depreciation you experience the minute you drive a new car off of the lot.  As a result, I’m more attuned to used-car valuations. Naturally, late-model brands with a history of dependability have higher, more stable resale values — but the same isn’t always true for stocks. Take tobacco giant Altria Group (NYSE: MO). Over the past five years, the company’s net income has grown… Read More

As you might deduce from reading my work here at StreetAuthority, I’m a bit of a cheapskate.  #-ad_banner-#For example, I don’t buy new cars. I hate the idea of the instant, $5,000 depreciation you experience the minute you drive a new car off of the lot.  As a result, I’m more attuned to used-car valuations. Naturally, late-model brands with a history of dependability have higher, more stable resale values — but the same isn’t always true for stocks. Take tobacco giant Altria Group (NYSE: MO). Over the past five years, the company’s net income has grown at an average annual rate of around 7%. Not setting the woods on fire, but very predictable and consistent. Shareholders have been well rewarded: Not including dividends, the stock has returned an average of 47% a year over the past five years. Investors are willing to pay up for that consistency.  Going back to my car example: I had a Subaru that I bought used. It was a great car. I could set my watch to it. But what amazed me is how little I paid for it — and how little I got for it… Read More

You can have your $100,000 electric cars or $8 organic burritos…  #-ad_banner-#For my part, “boring” is exciting.  Judging by his portfolio, Warren Buffett would probably agree. Look at some of the top holdings of his Berkshire Hathaway (NYSE: BRK-B), such as Procter & Gamble (NYSE: PG), Coca-Cola (NYSE: KO) or Wells Fargo (NYSE: WFC). Soap, soda and banking… hardly cutting-edge.  Buffett’s portfolio of smaller companies that he’s purchased is also similarly mundane. The Oracle of Omaha likes businesses that are simple to understand, like See’s Candy or Dairy Queen, that are well run and produce consistent results. When… Read More

You can have your $100,000 electric cars or $8 organic burritos…  #-ad_banner-#For my part, “boring” is exciting.  Judging by his portfolio, Warren Buffett would probably agree. Look at some of the top holdings of his Berkshire Hathaway (NYSE: BRK-B), such as Procter & Gamble (NYSE: PG), Coca-Cola (NYSE: KO) or Wells Fargo (NYSE: WFC). Soap, soda and banking… hardly cutting-edge.  Buffett’s portfolio of smaller companies that he’s purchased is also similarly mundane. The Oracle of Omaha likes businesses that are simple to understand, like See’s Candy or Dairy Queen, that are well run and produce consistent results. When I was looking for a story idea to pitch to my editors here at StreetAuthority, I went back to an obscure stock that I look at from time to time: Oil-Dri Corporation of America (NYSE: ODC). As I was doing my research, Oil-Dri struck me as a company Berkshire might like to gobble up. So what does Oil-Dri do? Innovative waterless fracking or maybe some kind of specialized environmental cleanup? Not exactly. Oil-Dri is the world’s largest manufacturer of cat litter.  Oil-Dri makes cat litter under the Johnny Cat and Cat’s Pride brands as well as private-label brands. The company… Read More

I’ve been in this racket for nearly two decades. And I have to say, I’ve heard lots of creative excuses from companies for missing earnings estimates, all of which seem to be about as effective as “the dog ate my homework.” #-ad_banner-#The weather has always been my favorite excuse especially with retail and homebuilding and related supply stocks. “It was too hot, so people didn’t buy.” Or “It was too cold, so people didn’t come out.” Granted, here in the U.S., we did have an extremely cold and extended winter. So, when first-quarter earnings rolled out this year, the weather… Read More

I’ve been in this racket for nearly two decades. And I have to say, I’ve heard lots of creative excuses from companies for missing earnings estimates, all of which seem to be about as effective as “the dog ate my homework.” #-ad_banner-#The weather has always been my favorite excuse especially with retail and homebuilding and related supply stocks. “It was too hot, so people didn’t buy.” Or “It was too cold, so people didn’t come out.” Granted, here in the U.S., we did have an extremely cold and extended winter. So, when first-quarter earnings rolled out this year, the weather was blamed by more businesses than usual. But one building products company caught my attention by delivering stellar earnings without a mention of the snow or ice — and its back story is even more intriguing than its growth rate. Based in Israel, Caesarstone Sdot-Yam (Nasdaq: CSTE) is a leading manufacturer of engineered quartz surfaces used mainly in countertops for the residential and commercial markets. The company sells in 42 countries through both direct and independent distribution. Since its 2012 IPO, the stock has been on a tear. But as interesting as CSTE’s merits might be, the story… Read More

The story of Medallion Financial (Nasdaq: TAXI) is about as plucky and all-American as you can get.  #-ad_banner-#With its roots in a fleet of New York City cabs built from one in 1937 to 500 by a Polish immigrant, Leon Murstein, the company wanted to sell some of its cab fleet in 1979. In NYC, the sale of a taxicab basically involves selling and transferring the license of medallion the city issues to allow operation.  At the time, no banks would finance that type of transaction. So, the company was forced, out… Read More

The story of Medallion Financial (Nasdaq: TAXI) is about as plucky and all-American as you can get.  #-ad_banner-#With its roots in a fleet of New York City cabs built from one in 1937 to 500 by a Polish immigrant, Leon Murstein, the company wanted to sell some of its cab fleet in 1979. In NYC, the sale of a taxicab basically involves selling and transferring the license of medallion the city issues to allow operation.  At the time, no banks would finance that type of transaction. So, the company was forced, out of necessity, to hold the paper on the sale.  That turned out to be a great decision. Since that necessary financing transaction in 1979, Medallion — which is still run by the Murstein family — has originated over $2.5 billion in taxi medallion loans with zero gross losses. What’s the secret to success? Specialization. “In Niches There Are Riches” This is actually the company’s motto — and it’s that “stick to your knitting” philosophy that’s driven Medallion’s success.  Now designated as a business development company, Medallion differs from most BDCs in that its core loans, backed by taxicab medallions, have… Read More