Toiling in the shadows of Google (Nasdaq: GOOG), Apple (Nasdaq: AAPL) and many other tech stars in California’s Silicon Valley, a team of 1,500 technologists are hard at work on behalf of an unlikely employer: Wal-Mart (NYSE: WMT). #-ad_banner-#The retail giant has belatedly understood that simply having website for e-commerce won’t cut it in the era of social media and mobile surfing. In response, the company is now committing serious resources to its digital efforts. Will those 1,500 Wal-Mart staffers help turn the company into a leading-edge tech firm? Probably not. But they can identify hundreds of small ways to… Read More

Toiling in the shadows of Google (Nasdaq: GOOG), Apple (Nasdaq: AAPL) and many other tech stars in California’s Silicon Valley, a team of 1,500 technologists are hard at work on behalf of an unlikely employer: Wal-Mart (NYSE: WMT). #-ad_banner-#The retail giant has belatedly understood that simply having website for e-commerce won’t cut it in the era of social media and mobile surfing. In response, the company is now committing serious resources to its digital efforts. Will those 1,500 Wal-Mart staffers help turn the company into a leading-edge tech firm? Probably not. But they can identify hundreds of small ways to improve the online shopping experience. After all, consumers now carry the Internet in their pocket, thanks to the proliferation of smartphones. As Gibu Thomas, Wal-Mart’s senior vice president of mobile and digital, recently told The Atlantic magazine, “IBM published some data about what retail traffic comes from mobile devices, as a kind of benchmark, and Wal-Mart’s numbers are a lot higher than the industry norm.” He adding that with the use of technology, “we can combine the breadth of online and the immediacy of offline to create an experience that means we can be a one-stop… Read More

For investors that count on dividend payments to cover their living expenses, the prospect of a dividend cut can create real headaches. That’s why some investors own only the income-producing stocks that have never cut their dividend. It’s easy to find such companies. Product planners at Standard & Poor’s track a group of these steady Eddies in a category called Dividend Aristocrats. These are companies that have raised their dividend for at least 25 straight years. Right now, there are 55 companies that hold that distinction, as all of them managed to boost their payouts —… Read More

For investors that count on dividend payments to cover their living expenses, the prospect of a dividend cut can create real headaches. That’s why some investors own only the income-producing stocks that have never cut their dividend. It’s easy to find such companies. Product planners at Standard & Poor’s track a group of these steady Eddies in a category called Dividend Aristocrats. These are companies that have raised their dividend for at least 25 straight years. Right now, there are 55 companies that hold that distinction, as all of them managed to boost their payouts — even during the economic meltdown of 2008 and 2009. #-ad_banner-#To be sure, some of these Aristocrats haven’t showered a great deal of attention on their dividends in recent years. Take steelmaker Nucor (NYSE: NUE) as an example. Nucor’s dividend stood at $1.44 in 2010 and has risen exactly one penny every year since. It’s almost as if the dividend hikes are a mere token gesture as a way to maintain the Aristocrat status. As we’ve noted here at StreetAuthority on a number of occasions in the past year, investors can no longer focus simply on a dividend yield but must… Read More

Throughout the 1990s shares of Wal-Mart (NYSE: WMT) and Microsoft (Nasdaq: MSFT) exploded higher year after year. Investors realized that these firms had so powerfully revolutionized their respective industries, that they could maintain solid growth far into the future. #-ad_banner-#Their faith was well placed. Wal-Mart, for example, which had racked up an impressive $156 billion in sales by fiscal (January) 2001, would boost sales above $300 billion by fiscal 2006 and $400 billion by fiscal 2010. For its part, Microsoft saw its sales grow from $23 billion in fiscal (June) 2000 to $60 billion by fiscal 2008. Trouble is, investors… Read More

Throughout the 1990s shares of Wal-Mart (NYSE: WMT) and Microsoft (Nasdaq: MSFT) exploded higher year after year. Investors realized that these firms had so powerfully revolutionized their respective industries, that they could maintain solid growth far into the future. #-ad_banner-#Their faith was well placed. Wal-Mart, for example, which had racked up an impressive $156 billion in sales by fiscal (January) 2001, would boost sales above $300 billion by fiscal 2006 and $400 billion by fiscal 2010. For its part, Microsoft saw its sales grow from $23 billion in fiscal (June) 2000 to $60 billion by fiscal 2008. Trouble is, investors didn’t benefit. Shares of Wal-Mart fell more than 25% from their 1999 peak over the next decade, while shares of Microsoft lost half of their value. In hindsight, it would have been wise to sell these two stocks prior to another decade of solid sales and profit growth. Simply put, their valuations had become so extended that the company’s financial performance needed a decade to catch up. That’s worth thinking about as investors continue to snap up shares of Chipotle Mexican Grill (NYSE: CMG), an extremely well-run company in the midst of robust growth, which is accompanied by too-rich valuations. Read More

Many corporate executives place a lot of faith in the rational behavior of the markets. If they deliver on the promises they’ve set out for investors, the market should reward them with a sufficiently higher share price. But sometimes, the market fails to respond, even when management delivers. The executives at DVR pioneer TiVo (Nasdaq: TIVO) have surely done what they promised, yet shares remain remarkably undervalued. Roughly two years ago, I laid out a series of catalysts that would help boost this stock by 50%. #-ad_banner-#Shares have risen 40% since then, but that’s cold comfort for investors… Read More

Many corporate executives place a lot of faith in the rational behavior of the markets. If they deliver on the promises they’ve set out for investors, the market should reward them with a sufficiently higher share price. But sometimes, the market fails to respond, even when management delivers. The executives at DVR pioneer TiVo (Nasdaq: TIVO) have surely done what they promised, yet shares remain remarkably undervalued. Roughly two years ago, I laid out a series of catalysts that would help boost this stock by 50%. #-ad_banner-#Shares have risen 40% since then, but that’s cold comfort for investors who have seen the S&P 500 rise 52% in that time. Shares of cable TV companies have more than doubled in that time, making TiVo a relative loser in this industry. But if you are looking to apply fresh money to this industry now, forget the cable giants. It’s simply hard to see any more upside for them. Instead, refocus your sights on TiVo, which holds appeal to both value and growth investors. Let’s start with the value part of the equation. In my late 2011 profile of the company, I noted that TiVo stood to greatly gain from a… Read More

Sometimes an investment idea is so strong, it bears repeating. #-ad_banner-#In late February, my colleague Michael Vodicka implored readers to give emerging market stocks a fresh look. Though he cautioned that these struggling markets may not have yet hit bottom, he added that “the MSCI Emerging Markets Index is trading at just 11 times earnings. Not only is that a massive 40% discount to the MSCI World Index, it’s the widest gap since the financial crisis of 2008 and a 10-year low.” As a potential catalyst, Michael noted that the recent price rebound for many commodities should help bolster a… Read More

Sometimes an investment idea is so strong, it bears repeating. #-ad_banner-#In late February, my colleague Michael Vodicka implored readers to give emerging market stocks a fresh look. Though he cautioned that these struggling markets may not have yet hit bottom, he added that “the MSCI Emerging Markets Index is trading at just 11 times earnings. Not only is that a massive 40% discount to the MSCI World Index, it’s the widest gap since the financial crisis of 2008 and a 10-year low.” As a potential catalyst, Michael noted that the recent price rebound for many commodities should help bolster a number of emerging market economies. But there’s another, even more powerful reason to own emerging markets, which merely strengthens the investment case: They reduce risk. That may seem counterintuitive, so let me explain. Risk-Adjusted Returns Back in November, S&P Capital’s Global Equity Strategist Alec Young took a look at historical market returns to identify how domestic and foreign stocks performed each year. If these two asset classes merely mirrored each other, then there would be no need to own foreign stocks. But as we saw in 2013, U.S. stocks soared, while emerging markets slumped. The advantage to owning asset… Read More

Investing in turnaround stocks can be quite challenging. It takes a keen eye to ignore the current bad news and visualize how things will look a year or two from now. The upside: If you can spot a turnaround before the crowd, then you can reap significant profits by the time the good news has begun to flow. #-ad_banner-#Though he’s most famous for several high profile short positions, Greenlight Capital’s David Einhorn also commands a great deal of respect on Wall Street for his ability to spot turnarounds. As we noted six months ago, he started out with just $1… Read More

Investing in turnaround stocks can be quite challenging. It takes a keen eye to ignore the current bad news and visualize how things will look a year or two from now. The upside: If you can spot a turnaround before the crowd, then you can reap significant profits by the time the good news has begun to flow. #-ad_banner-#Though he’s most famous for several high profile short positions, Greenlight Capital’s David Einhorn also commands a great deal of respect on Wall Street for his ability to spot turnarounds. As we noted six months ago, he started out with just $1 million in assets under management in 1996, and now oversees $4 billion in investments for his clients. Einhorn knows full well that turnaround stocks can try your patience: One of his most recent turnaround picks has just delivered a fresh set of bad news, sending shares down to levels below his purchase price. In the fourth quarter of 2013, Einhorn’s firm acquired $60 million stake in oil services firm McDermott International (NYSE: MDR), at an average price of $7.80 a share. He’s already underwater with this this pick. But a deeper look behind McDermott’s woes reveals a set of fixable… Read More

For some investors, mid-cap stocks, which can be found in the S&P 400 Mid-Cap Index, are the “Goldilocks” of the stock market. They aren’t so big that they can’t quickly adjust to changing industry dynamics. And they aren’t so small that they suffer the extreme revenue swings from the economy’s ebbs and flows. #-ad_banner-#Most mid-cap companies have been in operation for decades, and their relative maturity enables them to generate prodigious free cash flow (FCF). That figure, which equates to operating cash flow, minus capital expenditures, is a crucial determinant in one of our favorite investment angles: Total Yield. Read More

For some investors, mid-cap stocks, which can be found in the S&P 400 Mid-Cap Index, are the “Goldilocks” of the stock market. They aren’t so big that they can’t quickly adjust to changing industry dynamics. And they aren’t so small that they suffer the extreme revenue swings from the economy’s ebbs and flows. #-ad_banner-#Most mid-cap companies have been in operation for decades, and their relative maturity enables them to generate prodigious free cash flow (FCF). That figure, which equates to operating cash flow, minus capital expenditures, is a crucial determinant in one of our favorite investment angles: Total Yield. In recent months, we’ve been highlighting the virtue of companies that are able to lavishly reward investors with a combination of dividends, share buybacks and debt reductions. Simply put, these companies can only deliver the goods of they have the free cash flow to support it. High free cash flow is important for another reason: A company’s FCF yield can be directly compared to the yield you’ll get on other investments, such as CDs, Treasury bills, or annuities. Those products usually offer up small yields, these days, below 3%. In contrast, a few dozen mid-cap stocks offer FCF yields that… Read More

When struggling wireless firm BlackBerry (Nasdaq: BBRY) provided a quarterly update in late December, Merrill Lynch’s Tal Liani didn’t mince words: “Third-quarter results were abysmal, with hardware and services revenue continuing to decline at an alarming pace, and margins deep in negative territory,” he wrote. Shares, trading at $7.25 at the time, would soon fall to $6, he predicted. Liani’s views were digested by the market, and then summarily ignored. BlackBerry has gone on to post one of the best returns of any tech stock over the past two months. If you bought this stock just ahead of that quarterly… Read More

When struggling wireless firm BlackBerry (Nasdaq: BBRY) provided a quarterly update in late December, Merrill Lynch’s Tal Liani didn’t mince words: “Third-quarter results were abysmal, with hardware and services revenue continuing to decline at an alarming pace, and margins deep in negative territory,” he wrote. Shares, trading at $7.25 at the time, would soon fall to $6, he predicted. Liani’s views were digested by the market, and then summarily ignored. BlackBerry has gone on to post one of the best returns of any tech stock over the past two months. If you bought this stock just ahead of that quarterly earnings release, you’d be sitting on a quick 60% gain.   With BlackBerry again set to deliver quarterly results at the end of this month, it’s fair to ask: Should you buy it? Nothing to Sugarcoat As Merrill’s Liani noted, Blackberry’s fiscal third quarter (ended November) was awful. Not only did all of the key financial metrics fall far short of consensus forecasts, but the company likely sold just 1.1 million BB10-based phones in the quarter. This is the company’s newest and most advanced operating system, which was released to considerable fanfare a few years ago. Read More

For investors who focus their investment strategies with regard to the broader economic backdrop, the next few weeks are likely to get a lot of attention. A slew of key data points may help investors better assess whether recent signs of slowdown are just a passing phase, or a harbinger of a deepening trough for the world’s largest economy. Approaching Stall Speed Each week, economists at Morgan Stanley (NYSE: MS) incorporate fresh data points to update their models for GDP growth. At the end of January, these economists predicted the U.S. economy would grow around 2.3% in the first… Read More

For investors who focus their investment strategies with regard to the broader economic backdrop, the next few weeks are likely to get a lot of attention. A slew of key data points may help investors better assess whether recent signs of slowdown are just a passing phase, or a harbinger of a deepening trough for the world’s largest economy. Approaching Stall Speed Each week, economists at Morgan Stanley (NYSE: MS) incorporate fresh data points to update their models for GDP growth. At the end of January, these economists predicted the U.S. economy would grow around 2.3% in the first quarter. That figure is roughly in-line with the fourth quarter of 2013’s GDP growth rate (which was recently revised down from 3.2%).#-ad_banner-# But over the past month, Morgan Stanley’s forecasts have been steadily trimmed. Thanks to weak construction spending, slow retail sales and a low level of housing starts, they now think the economy is on track to grow just 0.7% in the first quarter. To put that in context, the U.S. economy has grown less than 1% (on an annualized pace) only once in the past 11 quarters. In the third quarter of 2011, the economy almost slid back… Read More

My grandma worked as a secretary for much of her life. Without my grandpa’s knowledge, she squirreled away part of her monthly earnings into the stock market. #-ad_banner-#Like many investors of her era, she only cared about two kinds of stocks: electric utilities and telephone companies. Indeed, it was the perennial promise of ever-higher dividend payments that led my grandma to call AT&T (NYSE: T) her “no brainer” stock. But if she were alive today, I would encourage her to sell off her shares in AT&T — because the day is approaching when Ma Bell’s dividend stops growing and starts… Read More

My grandma worked as a secretary for much of her life. Without my grandpa’s knowledge, she squirreled away part of her monthly earnings into the stock market. #-ad_banner-#Like many investors of her era, she only cared about two kinds of stocks: electric utilities and telephone companies. Indeed, it was the perennial promise of ever-higher dividend payments that led my grandma to call AT&T (NYSE: T) her “no brainer” stock. But if she were alive today, I would encourage her to sell off her shares in AT&T — because the day is approaching when Ma Bell’s dividend stops growing and starts shrinking. A range of pressures are starting to hurt this once-venerable business, and the pressures are likely to deepen in coming years. The Vultures Are Circling Back in September, I noted that 106.5 million shares had been held by short sellers. Just-released short sales data shows that figure has surged 20 million in the first two weeks of February to a stunning 171 million. We’re now talking about the most heavily shorted stock on the New York Stock Exchange, by a significant margin. Six months ago, I suggested that the barriers to entry in the wireless telecom space were… Read More