More than seven decades ago, in their investing bible “Security Analysis,” the famed value investors Benjamin Graham and David Dodd explained the core basis of a stock’s value. #-ad_banner-#They wanted investors to view a company in the context of its liquidation value, as a means of ensuring that a stock was a bargain. “By the liquidating value of an enterprise we mean the money that the owners could get out of it if they wanted to give it up. They might sell all or part of it to someone else, on a going-concern basis. Or else they might turn the… Read More

More than seven decades ago, in their investing bible “Security Analysis,” the famed value investors Benjamin Graham and David Dodd explained the core basis of a stock’s value. #-ad_banner-#They wanted investors to view a company in the context of its liquidation value, as a means of ensuring that a stock was a bargain. “By the liquidating value of an enterprise we mean the money that the owners could get out of it if they wanted to give it up. They might sell all or part of it to someone else, on a going-concern basis. Or else they might turn the various kinds of assets into cash, in piecemeal fashion, taking whatever time is needed to obtain the best realization from each. Such liquidations are of everyday occurrence in the field of private business.” When those words were written, a wide variety of companies could be bought for prices below their liquidation value. These days, such stocks are hard to find. Of the 1,500 companies in the S&P 400, 500, and 600, less than 2% of them trade for less than their liquidation value, or what we today cite as being below tangible book value. Yet there is a compelling reason… Read More

Throughout the first seven weeks of 2014, the stock market has shown a wide range of emotions.#-ad_banner-# Fear-based selling in January has been replaced by a euphoric buying spree since early February. Yet don’t let the S&P 500’s rebound back to all-time highs fool you. Many individual stocks are now trading far from their 52-week highs, and a rising number of them are now plumbing 52-week lows. A look at the list of 52-week lows might evoke the old saying that you shouldn’t try to catch a falling knife. These stocks are being sold for good reason, and if the… Read More

Throughout the first seven weeks of 2014, the stock market has shown a wide range of emotions.#-ad_banner-# Fear-based selling in January has been replaced by a euphoric buying spree since early February. Yet don’t let the S&P 500’s rebound back to all-time highs fool you. Many individual stocks are now trading far from their 52-week highs, and a rising number of them are now plumbing 52-week lows. A look at the list of 52-week lows might evoke the old saying that you shouldn’t try to catch a falling knife. These stocks are being sold for good reason, and if the bad news continues, then they’ll keep making fresh 52-week lows. But contrarians love to look at these kinds of stocks. Warren Buffett’s maxim that you should love stocks when they are hated applies to the broader market action, but many value investors take that maxim more literally: Any individual stock that is deeply out of favor has a better chance of winning new support than stocks that are already fully loved by the crowd. Here’s a look at some recent stocks making fresh 52-week or even multi-year lows in recent sessions. Slumping IPOs It’s not unusual to… Read More

In hindsight, the gold bugs were operating under the wrong investment thesis. They assumed that aggressive stimulus policies by the Federal Reserve and other central banks would lead to ruinous inflation. Yet after more than $1 trillion in stimulus — in just the U.S. — price pressures have been non-existent. Europe is even treading perilously close to deflation these days. Yet as 2013 turned out to be a miserable year for gold investors, the precious metal has made a sharp U-turn in 2014. Surging demand from China has pushed gold prices to four-month highs. Chinese consumers bought more than 1,000… Read More

In hindsight, the gold bugs were operating under the wrong investment thesis. They assumed that aggressive stimulus policies by the Federal Reserve and other central banks would lead to ruinous inflation. Yet after more than $1 trillion in stimulus — in just the U.S. — price pressures have been non-existent. Europe is even treading perilously close to deflation these days. Yet as 2013 turned out to be a miserable year for gold investors, the precious metal has made a sharp U-turn in 2014. Surging demand from China has pushed gold prices to four-month highs. Chinese consumers bought more than 1,000 tons of gold in 2013, according to the World Gold Council, as investors seek a safe haven at a time when real estate prices appear to be in a bubble. #-ad_banner-#Yet investors shouldn’t be assuming that we’re now at the start of a fresh bull market in gold. The “gold as inflation hedge” strategy is officially dead, and although China and India remain active buyers of gold, many central banks are in the process of shedding their gold hoards. Some investors may be getting carried away with renewed bullishness for gold. The Market Vectors Junior Gold Miners ETF… Read More

For half a decade, investors have been waiting for the economy to start generating faster growth. #-ad_banner-#The fact that GDP growth has failed to live up to the optimism you see at the start of each year explains why analysts often issue bullish new earnings per share (EPS) forecasts, only to ratchet them down over time. We’ve seen that trend play out many times in this current earnings season. Analysts project lofty forward estimates, and then the company dampens those hopes by issuing guidance that is below the consensus. Yet some companies are able to buck that negative cycle, delivering… Read More

For half a decade, investors have been waiting for the economy to start generating faster growth. #-ad_banner-#The fact that GDP growth has failed to live up to the optimism you see at the start of each year explains why analysts often issue bullish new earnings per share (EPS) forecasts, only to ratchet them down over time. We’ve seen that trend play out many times in this current earnings season. Analysts project lofty forward estimates, and then the company dampens those hopes by issuing guidance that is below the consensus. Yet some companies are able to buck that negative cycle, delivering robust quarterly results and making a credible case for strong future profit growth. I screened the 1,500 companies in the S&P 400, 500 and 600 to look for companies that topped recent profit forecasts and also saw their 2014 and 2015 profit outlooks boosted. I then narrowed down the group to include companies that are expected to boost per-share profits by at least 20% in 2015 and again in 2016. Only 20 companies made the cut. Yet simply making the grade isn’t good enough. Some of these stocks also sport very high price-to-earnings (P/E) multiples — based on 2016 profit… Read More

For the past decade, investors, government regulators, and concerned citizens have focused on a pair of catchphrases: “climate change” and “off the grid.” #-ad_banner-#The rapid deployment of solar and wind power played into both of those themes. These power sources generate zero pollution and can help to reduce demand on the world’s aging electrical grid. Yet as I just noted in my recent review of a new set of rising stars in the clean energy space, hydrogen power suddenly has a new lease on life. Through hydrolysis, the universe’s most abundant element can be used to create electricity while producing… Read More

For the past decade, investors, government regulators, and concerned citizens have focused on a pair of catchphrases: “climate change” and “off the grid.” #-ad_banner-#The rapid deployment of solar and wind power played into both of those themes. These power sources generate zero pollution and can help to reduce demand on the world’s aging electrical grid. Yet as I just noted in my recent review of a new set of rising stars in the clean energy space, hydrogen power suddenly has a new lease on life. Through hydrolysis, the universe’s most abundant element can be used to create electricity while producing zero emissions. A range of companies are now seeing steadily rising sales as they develop hydrogen-powered fuel cells for a range of applications. The key phrase there: “a range of companies.” Though this technology is undeniably exciting and will likely play a key role in our energy future, there are so many companies working to lure customers that competition is fierce and pricing is tough. That’s why I suggested caution with Plug Power (Nasdaq: PLUG) and FuelCell Energy (Nasdaq: FCEL). In 2012, these firms had gross margins of minus 55% and 4%, respectively. They may look to make it up… Read More

For a brief moment in 2006, the hallways at Ballard Power (Nasdaq: BLDP) were filled with good cheer. President George W. Bush had just touted the promise of hydrogen power in his State of the Union address, and Ballard’s shares tripled nearly overnight. Yet those high hopes for the company — and its investors — were soon dashed. Ballard didn’t see any bump in revenues, and shares eventually crashed to fresh all-time lows. #-ad_banner-#Ballard’s not alone. Key rivals in the emerging field of alternate power generation also went into hibernation after that bout of euphoria in 2006. Hopes… Read More

For a brief moment in 2006, the hallways at Ballard Power (Nasdaq: BLDP) were filled with good cheer. President George W. Bush had just touted the promise of hydrogen power in his State of the Union address, and Ballard’s shares tripled nearly overnight. Yet those high hopes for the company — and its investors — were soon dashed. Ballard didn’t see any bump in revenues, and shares eventually crashed to fresh all-time lows. #-ad_banner-#Ballard’s not alone. Key rivals in the emerging field of alternate power generation also went into hibernation after that bout of euphoria in 2006. Hopes for this industry rose anew after the election of President Barack Obama. He had been expected to be a supporter of such companies, but their revenue bases failed to get any sort of traction in the first years of his presidency. (Recently, the Obama administration has thrown renewed support for hydrogen power and fuel cell technologies, though at much more modest levels than had once been expected.) Despite the lack of massive government support, these alternative energy stocks are back — in a big way. Ballard Power, along with its peers, is in the midst of… Read More

In hundreds of biomedical labs across the country, researchers have been working to develop treatments for a wide range of cancers. Yet the medical community isn’t ignoring heart disease, the nation’s leading killer. #-ad_banner-#Changing demographics could lead to a surge in heart disease, which generally affects older Americans. According to the U.S. Census Bureau, there were 40 million Americans age 65 or older in 2010. That figure is expected to rise to 89 million by 2050. Though there is no such thing as a cure for heart disease, a number of approaches are helping to reduce… Read More

In hundreds of biomedical labs across the country, researchers have been working to develop treatments for a wide range of cancers. Yet the medical community isn’t ignoring heart disease, the nation’s leading killer. #-ad_banner-#Changing demographics could lead to a surge in heart disease, which generally affects older Americans. According to the U.S. Census Bureau, there were 40 million Americans age 65 or older in 2010. That figure is expected to rise to 89 million by 2050. Though there is no such thing as a cure for heart disease, a number of approaches are helping to reduce the initial risk of heart attack, or at least aid in avoiding their recurrence. Two young companies have devised novel approaches and could soon see their devices used by an increasing number of cardiologists. 1. BioTelemetry (Nasdaq: BEAT ) This company, once known as CardioNet, sells equipment that enables doctors to remotely analyze and diagnose a patient’s heart function. Patients’ vital signs are wirelessly transmitted back to the company’s network diagnostic center, and a medical professional is notified the moment a patient shows signs of a dangerous heart condition, such as arrhythmia or other heart rhythm disorders. Such signs are… Read More

Professional short sellers often like to work alone — at least until they’ve built a sizable short position in a stock.  They realize that a large short interest from other short sellers can create real trouble. Heavily-shorted stocks (also known as “crowded shorts”) can lead to a massive short squeeze that creates havoc for all short sellers as they all start to cover their positions at once.  Case in point: Radio Shack (NYSE: RSH), the beleaguered electronics retailer, which had a 40 million short sale wager against it as of Jan. 31. That short position represents more than 40% of… Read More

Professional short sellers often like to work alone — at least until they’ve built a sizable short position in a stock.  They realize that a large short interest from other short sellers can create real trouble. Heavily-shorted stocks (also known as “crowded shorts”) can lead to a massive short squeeze that creates havoc for all short sellers as they all start to cover their positions at once.  Case in point: Radio Shack (NYSE: RSH), the beleaguered electronics retailer, which had a 40 million short sale wager against it as of Jan. 31. That short position represents more than 40% of the trading float and the equivalent of 12 days’ worth of trading volume (known as “days to cover”). #-ad_banner-#Yet for every RadioShack that causes headaches for short sellers due to a short squeeze, many other heavily-shorted stocks turn into big paydays for short sellers. As an example, I noted a very large short position in Uni-Pixel (Nasdaq: UNXL) back in October, and shares have plunged 47% since then. The key takeway is that heavily shorted stocks often have a binary outcome. So it pays to look at the most heavily shorted stocks on a regular basis and pursue… Read More

Over the past few years, I’ve been conducting quarterly reviews of companies that are aggressive repurchasers of their own stock. #-ad_banner-#I’ve tended to focus on companies that announced a share repurchase plan that represents at least 5% of shares outstanding. Anything smaller may not have much of an impact on earnings per share (EPS). Yet in recent months, we here at StreetAuthority have broadened our measure of corporate generosity to focus not just on buybacks but also dividends and debt reductions. These three pillars combine to form what we call our Total Yield strategy, and we’re always on the prowl… Read More

Over the past few years, I’ve been conducting quarterly reviews of companies that are aggressive repurchasers of their own stock. #-ad_banner-#I’ve tended to focus on companies that announced a share repurchase plan that represents at least 5% of shares outstanding. Anything smaller may not have much of an impact on earnings per share (EPS). Yet in recent months, we here at StreetAuthority have broadened our measure of corporate generosity to focus not just on buybacks but also dividends and debt reductions. These three pillars combine to form what we call our Total Yield strategy, and we’re always on the prowl for companies that can deliver a total yield in excess of 10%. Below you’ll find a group of companies that meet the criteria, based on share buyback announcements during the current earnings season. A few notes about this table. First, not all of these buybacks will be completed over the next 12 months, so the total yield analysis may cover a multi-year period. Second, only some of these companies are also reducing debt. In those instances, the total yield is even higher than the figures you see above.  Also, many of these companies are buying… Read More

Across the main thoroughfares of the Shinjuku neighborhood of Tokyo, trendy consumers are embracing Apple’s (Nasdaq: AAPL) latest iPhone. Just about every other trendy neighborhood in Japan, for that matter, is doing the same.  #-ad_banner-#According to the Japan Daily Press, Apple now controls more than one-third of the Japanese smartphone market. Apple has taken market share away from rivals such as Sharp and Fujitsu, though the U.S. juggernaut is causing especially pronounced pain for its most famous Japanese rival — Sony (NYSE: SNE).  For a company that was once synonymous with consumer technology innovation, a fourth-place… Read More

Across the main thoroughfares of the Shinjuku neighborhood of Tokyo, trendy consumers are embracing Apple’s (Nasdaq: AAPL) latest iPhone. Just about every other trendy neighborhood in Japan, for that matter, is doing the same.  #-ad_banner-#According to the Japan Daily Press, Apple now controls more than one-third of the Japanese smartphone market. Apple has taken market share away from rivals such as Sharp and Fujitsu, though the U.S. juggernaut is causing especially pronounced pain for its most famous Japanese rival — Sony (NYSE: SNE).  For a company that was once synonymous with consumer technology innovation, a fourth-place standing on its home turf is quite sobering. Adding insult to injury, Sony’s once-vaunted VAIO laptops no longer hold much cachet either. Sony’s losing streak has been underway for quite some time. Sales have shrunk every year since fiscal 2008, with revenue falling more than $20 billion since then to a recent $66.5 billion. SNE has dropped by more than two-thirds since 2007. In that time, shares of Apple have soared more than 500%. Yet as is often the case in Japan, such a dismal performance has not been met with much complaint or action by shareholder activists. Read More