When business school professors look back on this era, they’ll likely talk to their students about one of the greatest turnarounds in the history of enterprise. Few companies have gone from near-death to industry titan in such a short time as Ford Motor (NYSE: F). And investors have showed their respect, with shares rising from under $2 in early 2009 to $17 just 20 months later. That’s an +850% gain! But signs are emerging that the party may be over for now. Shares made a quick move from $12 since mid-September… Read More

When business school professors look back on this era, they’ll likely talk to their students about one of the greatest turnarounds in the history of enterprise. Few companies have gone from near-death to industry titan in such a short time as Ford Motor (NYSE: F). And investors have showed their respect, with shares rising from under $2 in early 2009 to $17 just 20 months later. That’s an +850% gain! But signs are emerging that the party may be over for now. Shares made a quick move from $12 since mid-September (a +40% jump in two months), yet now appear to be hit by some profit-taking since last Monday. There’s no doubt that shares have plenty more upside: the stock trades for just eight times projected 2010 profits, and the auto industry is likely to see higher volume down the road. But the coming year still holds real challenges for this auto maker. Here are five key issues you’ll need to track if you own shares of Ford. If these items come to pass and shares slip back to the lower teens, it would create a fresh compelling… Read More

Here’s a fairly simple investment premise: if the stock market rises +10% or 15% in the next six months, one sector will rise +30% or even +50%. That’s because a rising stock market tends to bring out increased interest from individual investors. And they bring lots more business to online… Read More

As GM (NYSE: GM) celebrates an impressive re-entry into the public markets, investors are chewing over a clear theme. Both GM and Ford (NYSE: F) are far healthier companies, with much leaner cost structures and the ability to generate sharply improved profit margins as industry volumes rebound. In their shadow, key auto parts suppliers are also now in fighting shape after being bruised and battered in the economic freefall of 2008. The new adage for the industry: “what doesn’t kill you makes you stronger.” How bad did it get for… Read More

As GM (NYSE: GM) celebrates an impressive re-entry into the public markets, investors are chewing over a clear theme. Both GM and Ford (NYSE: F) are far healthier companies, with much leaner cost structures and the ability to generate sharply improved profit margins as industry volumes rebound. In their shadow, key auto parts suppliers are also now in fighting shape after being bruised and battered in the economic freefall of 2008. The new adage for the industry: “what doesn’t kill you makes you stronger.” How bad did it get for these auto parts suppliers? Domestic auto makers produced 15-16 million cars and trucks every year from 2001 to 2007. That figure fell to 12.5 million in 2008 and just 8.5 million in 2009. Years of steady profits were offset by massive losses in 2008 and 2009, and a number of these firms flirted with bankruptcy. For a short while, many of their stocks traded below $1. In a testament to just how much they have changed, all of the key players are likely to be nicely profitable again this year, even though the industry will produce just 11.5 million units. Read More

The ranks of “super-investors” are few, highlighted by the likes of Warren Buffett, George Soros and Carl Icahn. Investors like to track their every move. Smart investors should also watch the moves of David Einhorn, who runs Greenlight Capital. He started with just $1 million in 1996,… Read More

When money managers buy bonds offered by state and local governments, they gladly accept the tax-free interest payments that come with them. But they’re no fools. They know they can lose their investment if a state or local government goes into default. [See: “12 States in Financial Distress”] So these… Read More

Pity the average investor. They tend to jump into and out of the stock market at precisely the wrong times. In late August, I looked at the weekly investor sentiment poll conducted by the American Association of Individual Investors (AAII) and noted that most investors feared a big market tumble. [Read that article here] Historically speaking, you want to start buying stocks when most individual investors are shunning them. And that has once again proven to be the case. Since that August swoon, the S&P 500 has risen +14%. And like clockwork, that impressive performance has turned… Read More

Pity the average investor. They tend to jump into and out of the stock market at precisely the wrong times. In late August, I looked at the weekly investor sentiment poll conducted by the American Association of Individual Investors (AAII) and noted that most investors feared a big market tumble. [Read that article here] Historically speaking, you want to start buying stocks when most individual investors are shunning them. And that has once again proven to be the case. Since that August swoon, the S&P 500 has risen +14%. And like clockwork, that impressive performance has turned individual investors from bears to bulls. In the week ending November 10th, 57.6% of retail investors were bullish, according to the latest AAII poll. That’s up +9.3 percentage points from the prior week, and the most bullish reading since January 2007. So if bearish sentiment is always good for stocks, is bullish sentiment always bad for stocks? I pored over 25 years’ worth of data to gauge the market’s subsequent returns every time investors were more than 55% bullish. The results are mixed… An unusual spike… Read More

The initial public offering (IPO) market continues to heat up with deals coming this week for GM (NYSE: GM), Booz Allen (NYSE: BAH), Caesars Entertainment (NYSE: CZR) and a half dozen other firms. The flurry of deals puts us on track for the most robust quarter for IPOs in more than two years. And looking at the pipeline of new deal registrations, the first quarter of 2011 may be even hotter. I recently looked at a strategy that uses analyst research to find stocks about to pop. [See: “The Secret… Read More

The initial public offering (IPO) market continues to heat up with deals coming this week for GM (NYSE: GM), Booz Allen (NYSE: BAH), Caesars Entertainment (NYSE: CZR) and a half dozen other firms. The flurry of deals puts us on track for the most robust quarter for IPOs in more than two years. And looking at the pipeline of new deal registrations, the first quarter of 2011 may be even hotter. I recently looked at a strategy that uses analyst research to find stocks about to pop. [See: “The Secret Way to Play IPOs”] Yet that’s not the only way to look for upside among recent new deals. You can also scan lists for “broken IPOs,” which are firms that have been public for a short while and are drifting lower while investors focus on more established companies. Last month, I took a look at top-performing IPOs, as I wrote back then, “many new IPOs take time to find their sea legs and only take off well after their debuts. In fact, every single stock [mentioned in that piece] came out of the gate… Read More

It’s been a tough year for Chinese stocks that trade in the United States. Many of them have sold off — and stayed cheap — even as they sport impressive growth rates and low valuations. Thanks to a sharp drop on Friday on renewed concerns about an overheating economy,… Read More

We’re now in a “stock picker’s market.” The major averages are now moving sideways after a sustained two-month upward move, which means that stock selection becomes ever more crucial. In this kind of trading environment, it pays to see what’s working. Insights into why certain stocks are… Read More

Despite a fairly bleak quarterly report from Cisco Systems (Nasdaq: CSCO) on Thursday, investors should realize that troubles for Cisco don’t mean trouble for the whole sector. In fact, the tech sector has shaken off the gloom and doom of this summer, with the Nasdaq surging +20% since late August. Read More