The Dow Jones Industrial Average (DJIA) is clearly in fighting shape. The heavyweight index has already pounded out 17% gains this year, on top of gains of 10% to 11% in 2010, 2011 and 2012 as well. Yet a quick look at what’s not working in the Dow gives a glimpse of the index’s weak points. Four of the Dow’s 30 stocks are lagging behind the broader index by a wide margin. Yet only one of those can simply be seen as having an off year due to cyclical economic factors. The other three simply lack the strength and… Read More

The Dow Jones Industrial Average (DJIA) is clearly in fighting shape. The heavyweight index has already pounded out 17% gains this year, on top of gains of 10% to 11% in 2010, 2011 and 2012 as well. Yet a quick look at what’s not working in the Dow gives a glimpse of the index’s weak points. Four of the Dow’s 30 stocks are lagging behind the broader index by a wide margin. Yet only one of those can simply be seen as having an off year due to cyclical economic factors. The other three simply lack the strength and stamina to duke it out for the long haul, and you might want to reconsider their place in your portfolio. The four big laggards: 1. AT&T (NYSE: T ) Ma Bell’s shares were generating a small loss for the year before the recent Washington fiscal agreement pushed it slightly into the black. If the market retreats from the current euphoria by year’s end, AT&T will surely end up posting a down year.  In fact, short sellers are anticipating such a move.  As I noted last month, both AT&T and Sprint (NYSE: S) have seen rising short interest in recent months. Read More

Every quarter, the board of directors at youth-focused retailer The Buckle (NYSE: BKE) must decide how generous they will be with the company’s cash.#-ad_banner-# After all, they realize that many of the company’s investors count on dividends to help supplement their income. But these directors like to tread cautiously. They know that retail spending is hard to predict, and in any given year, sales and profits might not be as strong as the year before. The cautious approach explains why The Buckle is only committed to an $0.80 a share annual dividend — the same payout… Read More

Every quarter, the board of directors at youth-focused retailer The Buckle (NYSE: BKE) must decide how generous they will be with the company’s cash.#-ad_banner-# After all, they realize that many of the company’s investors count on dividends to help supplement their income. But these directors like to tread cautiously. They know that retail spending is hard to predict, and in any given year, sales and profits might not be as strong as the year before. The cautious approach explains why The Buckle is only committed to an $0.80 a share annual dividend — the same payout the company has offered for four straight years. Indeed, if you go to the leading financial websites, such as Yahoo Finance, you’ll spot that $0.80 a share payout, which translates into a so-so 1.5% dividend yield. But these websites don’t have their facts straight. The truth behind The Buckle’s dividend strategy is a lot more compelling. Let me explain… Even as this retailer sticks with a conservative dividend policy on a quarterly basis, investors are also treated to special one-time annual dividends that really change the game. The Buckle paid out a special $2.30 a share special dividend… Read More

Here’s a not-so-bold prediction: IBM (NYSE: IBM) is likely to be the next company in the Dow Jones Industrial Average to replace its CEO.#-ad_banner-# Since its board of directors appointed Virginia Rometty to lead the company on Oct. 26, 2011, IBM has steadily morphed from a technology leader to a cash cow. Innovation has been replaced by financial engineering, and the company’s just-completed third-quarter conference call was an exercise in deep frustration as analysts fumed that Big Blue keeps delivering another set of missteps. It’s not Rometty’s fault. She inherited a… Read More

Here’s a not-so-bold prediction: IBM (NYSE: IBM) is likely to be the next company in the Dow Jones Industrial Average to replace its CEO.#-ad_banner-# Since its board of directors appointed Virginia Rometty to lead the company on Oct. 26, 2011, IBM has steadily morphed from a technology leader to a cash cow. Innovation has been replaced by financial engineering, and the company’s just-completed third-quarter conference call was an exercise in deep frustration as analysts fumed that Big Blue keeps delivering another set of missteps. It’s not Rometty’s fault. She inherited a bloated behemoth. But it’s hard to find any solid moves that might pave the way for a turnaround either. In the eyes of investors, Rometty got off to a good start. She immediately tasked her charges with finding every opportunity to squeeze out profits, which pushed shares above $200 in early 2012 for the first time in company history. That time held another, more dubious distinction: IBM posted a revenue decline in the first quarter of 2012 and has yet to show revenue growth since. At this point, analysts have moved their ratings to “neutral” or “hold,” with price targets… Read More

After half a decade, the massive U.S. housing crisis is officially over. Pricing and demand for homes are improving, banks are no longer saddled with billions in sour loans, and shares of many homebuilders are trading far up from their generational lows seen in 2008 and 2009.  So should investors prepare for a housing boom in coming years? If so, that would make this a great time to buy homebuilding stocks, which have recently cooled off after multi-year gains. Here’s a look at five key stats to look for in the housing market to give a sense of what lies… Read More

After half a decade, the massive U.S. housing crisis is officially over. Pricing and demand for homes are improving, banks are no longer saddled with billions in sour loans, and shares of many homebuilders are trading far up from their generational lows seen in 2008 and 2009.  So should investors prepare for a housing boom in coming years? If so, that would make this a great time to buy homebuilding stocks, which have recently cooled off after multi-year gains. Here’s a look at five key stats to look for in the housing market to give a sense of what lies ahead. 1. 9 Years And 5 Months That’s how long it has been since the average home in the top 20 U.S. cities sold for the price it sells for today. And adjusted for inflation, home prices are substantially cheaper than they were back in May 2004.  Housing prices peaked in late 2006 and are off roughly 20% since then. The hardest-hit markets since September 2006: Las Vegas, Phoenix, Miami and Tampa, all of which are still more than 35% below their peak. (Denver and Dallas are the only major cities to see prices move higher from that late 2006… Read More

Exactly 100 years after Henry Ford launched Ford Motor (NYSE: F), Elon Musk launched Tesla Motors (Nasdaq: TSLA). Despite the massive head start, Ford is now seen as the laggard. By a wide variety of measures, Tesla is held in far higher esteem by investors. Depending on your view, Tesla’s lack of an extensive operating history is either the company’s greatest virtue — enabling engineers to start with a blank slate, so to speak — or its greatest risk, as the company has miles to go before it becomes a high-volume automaker, capable of making money in any economic climate. Read More

Exactly 100 years after Henry Ford launched Ford Motor (NYSE: F), Elon Musk launched Tesla Motors (Nasdaq: TSLA). Despite the massive head start, Ford is now seen as the laggard. By a wide variety of measures, Tesla is held in far higher esteem by investors. Depending on your view, Tesla’s lack of an extensive operating history is either the company’s greatest virtue — enabling engineers to start with a blank slate, so to speak — or its greatest risk, as the company has miles to go before it becomes a high-volume automaker, capable of making money in any economic climate. In effect, shares of Ford are valued in the context of where the company has been and where it now stands. Shares of Tesla are valued on where the company is headed. Before we look down the road, let’s see how these two stocks compare based on projected 2013 results. #-ad_banner-#This is truly a breakout year for Tesla, as sales are likely to rise from $400 million in 2012 to more than $2 billion this year. And that figure could approach $4 billion by 2015. Of course, investors are paying up for that scorching growth. Shares trade for more… Read More

Year after year, credit card processor MasterCard (NYSE: MA) paid out a simple annual dividend of 60 cents a share. Management thought the payment was a nice gesture to investors, but… Read More

The notion of “peak oil” has been thoroughly debunked. Repeated predictions of the world’s oil shortage in coming years simply failed to account for our ability to tap into deeper, more complex seams of energy, buried under the ocean floor or the Arctic tundra. It may become more expensive to… Read More

In the expanding universe of exchange-traded funds (ETFs), it’s sink or swim. #-ad_banner-# Any ETFs that fail to gain a big enough investor following eventually are shut down. It simply costs too much to operate fund that only has a few million dollars and trades only a few thousand shares… Read More

The summer of 2008 was a brutal period for investors focused on micro-cap stocks (typically defined as companies with a market value below $200 million). Many of these stocks plunged sharply in a matter of months, even more profoundly than their large-cap peers. Yet the performance of this high-risk asset… Read More

As I regularly scan Wall Street research, I sometimes come across an eye-catching headline. Merrill Lynch’s recent report on agricultural equipment provider Agco (Nasdaq: AGCO) is a great example: “Margin Upside, Divy Could Soar, Raising Estimates.” It’s the middle part that got my attention.#-ad_banner-# Merrill’s analysts noted the dividend could… Read More