In the final stages of the dot-com boom, a number of stocks tacked on stunning gains day after day, in what’s known as a “melt-up.” These stocks were no longer logically valued on any sort of fundamental basis, and instead were squarely in the hands of momentum investors that know… Read More

The direction of the stock market in 2011 could well be determined in the next few months, as I noted last week. At the time, I suggested you tune in to Tuesday’s economic reports for the next read on the economy‘s pulse. With these reports hitting the tape, let’s see what the economy is telling us: Manufacturing heats up A monthly survey of business activity in Chicago (PMI) is flashing green. The index came in at 62.5, nicely ahead of forecasts of 60.0. (Any reading above 50.0 signals expansion in… Read More

The direction of the stock market in 2011 could well be determined in the next few months, as I noted last week. At the time, I suggested you tune in to Tuesday’s economic reports for the next read on the economy‘s pulse. With these reports hitting the tape, let’s see what the economy is telling us: Manufacturing heats up A monthly survey of business activity in Chicago (PMI) is flashing green. The index came in at 62.5, nicely ahead of forecasts of 60.0. (Any reading above 50.0 signals expansion in the factory sector). And the numbers behind the big number look even better. A gauge of new orders rose from 65.0 in October to 67.2 in November, and inventories fell sequentially from 54.9 to 48.4. That sub-50 reading means that inventories may be getting too lean, so we may be on the cusp of another inventory rebuilding cycle. It also means that economists are likely to raise their PMI forecasts for the next few months. Investors may want to see this level sustained for a few more months before calling it a trend. The… Read More

While staying focused on your best long-term ideas, it also helps to boost your portfolio by looking for stocks with a chance for quick moderate gains. And in the tech sector, we’ve seen all kinds of headline-induced winners in the past six months, thanks to M&A activity, robust quarterly results… Read More

When the entire value of a company shrinks down to the amount of cash on its balance sheet, you know investors have lost all interest. For AMAG Pharma (Nasdaq: AMAG), that’s precisely what happened. The biotech firm’s market value recently slipped below $300 million, less than the $304 million it recently had parked on its balance sheet. Investors assumed that the company was toast after its iron-boosting drug for use with dialysis patients was raising too many safety concerns with the Food and Drug Administration (FDA). In recent… Read More

When the entire value of a company shrinks down to the amount of cash on its balance sheet, you know investors have lost all interest. For AMAG Pharma (Nasdaq: AMAG), that’s precisely what happened. The biotech firm’s market value recently slipped below $300 million, less than the $304 million it recently had parked on its balance sheet. Investors assumed that the company was toast after its iron-boosting drug for use with dialysis patients was raising too many safety concerns with the Food and Drug Administration (FDA). In recent weeks, investors grew to believe the FDA would halt the drug outright, or at least force AMAG to use such burdensome warnings on its labels that most potential clients would simply steer clear. The good news is that the FDA has agreed to more moderate safety warnings. The better news is that analysts now think even moderate sales for Ferahame, AMAG’s leading drug, would still yield decent profits and that shares have ample upside after falling from $50 in January to a recent $16.  Pricey but necessary Iron… Read More

Taking aggressive steps to boost sales can be a wise move. But if you try to do too much too fast, investors can quickly grow concerned if rapid expansion plans are creating too much risk. That was the concern with LDK Solar (NYSE: LDK) in the past year, which borrowed… Read More

The S&P 500 is back near where it was a month ago. A surge into November has been met by recent profit-taking as we head into the Thanksgiving holidays. In pullbacks like these, I like to scan the lists of losing stocks to see if any bargains get uncovered. I… Read More

From 700 to 1,200. That’s the stunning move made by the S&P 500 in just 20 months. No one’s expecting that index to tack on another +70% in the next 20 months, but more than a few market watchers are calling for moderate +10% to +15% gains next year. For that to happen, the economy must prove to be on a path to health, with 2011 GDP growth rates exceeding what we’re getting in 2010. Indeed third-quarter GDP has just been upwardly revised from +2.0% to +2.5%. But a… Read More

From 700 to 1,200. That’s the stunning move made by the S&P 500 in just 20 months. No one’s expecting that index to tack on another +70% in the next 20 months, but more than a few market watchers are calling for moderate +10% to +15% gains next year. For that to happen, the economy must prove to be on a path to health, with 2011 GDP growth rates exceeding what we’re getting in 2010. Indeed third-quarter GDP has just been upwardly revised from +2.0% to +2.5%. But a just-released forecast from the National Association for Business Economics should give pause. The survey of economists anticipates GDP growth of +2.6% in 2011, down from +2.7% in 2010. And that just won’t cut it. So many components of the economic picture are reliant on more robust growth to finally become healthy again. Let’s look at what the difference would be between +2.0% to +2.5% growth and +3.5% to +4.0% growth in various parts of the economy. Based on the picture painted from these outcomes, you’ll want to adjust your portfolio accordingly. Read More

Tech stocks are back. A frenzy of M&A activity this summer, robust quarterly results in October and bright outlooks for 2011 have all helped bring fresh interest in this sector, which had been deep in the investor doghouse earlier this year. Yet one of the biggest tech stocks of all… Read More

Throughout September and October, the market bagged impressive gains as strategists started to view the economy as healthy enough to avoid the dreaded “double-dip” recession. More recently, the market has lost a bit of that luster as investors realize that we’re not necessarily set for impressive growth in 2011 either. A just released survey from the National Association for Business Economics (NABE) highlights expectations that the U.S. economy will grow just +2.7% this year and +2.6% in 2011. Their conclusion: “To a large extent, the latest NABE forecast reflects the view that… Read More

Throughout September and October, the market bagged impressive gains as strategists started to view the economy as healthy enough to avoid the dreaded “double-dip” recession. More recently, the market has lost a bit of that luster as investors realize that we’re not necessarily set for impressive growth in 2011 either. A just released survey from the National Association for Business Economics (NABE) highlights expectations that the U.S. economy will grow just +2.7% this year and +2.6% in 2011. Their conclusion: “To a large extent, the latest NABE forecast reflects the view that the economy will struggle against financial headwinds.” And the absence of robust growth means many companies will struggle to boost sales in 2011 and some companies may actually see sales pull back next year. With that in mind, here’s a profile of five companies that are expected to see sales slump next year. AOL (NYSE: AOL) A year ago this week, this former Internet powerhouse came public again, and it has not been the hot stock that some had hoped. In the past four quarters it’s become increasingly… Read More

When Cisco Systems (Nasdaq: CSCO) announced last week that business trends had slowed, its shares quickly moved toward a 52-week low. Management could at least take solace in the company’s bulletproof balance sheet, sporting $39 billion in cash. Read More