Investing in turnaround stocks can be quite profitable if you follow one simple rule: Only focus on companies that have identified the source of their woes and have delineated clear and workable solutions to stabilize and rebuild operations. For struggling global construction firm McDermott International (NYSE: MDR), the path to a turnaround has been spelled out for investors. Now it’s time to execute on that plan.#-ad_banner-# A quick glance at McDermott’s business model suggests… Read More

Investing in turnaround stocks can be quite profitable if you follow one simple rule: Only focus on companies that have identified the source of their woes and have delineated clear and workable solutions to stabilize and rebuild operations. For struggling global construction firm McDermott International (NYSE: MDR), the path to a turnaround has been spelled out for investors. Now it’s time to execute on that plan.#-ad_banner-# A quick glance at McDermott’s business model suggests this company should be flourishing. It has deep expertise in the construction of massive offshore energy platforms. In recent years, major oil companies have waded deep into the Atlantic Ocean as they seek to replace the output of fast-depleting onshore oil fields. For example, the Lula oil field off the coast of Rio de Janerio might hold up to 8 billion barrels of oil and is currently being developed by Brazil’s Petrobras (NYSE: PBR). But McDermott has stumbled badly, thanks to a series of managerial missteps. Most notably, the company has been unable to complete contracts under budget, turning potentially… Read More

Fix your mind on a pair of percentages: 73% and 27%. These two figures hold the key to why the long-term appeal of stocks remains quite bright (even if many investors would welcome a pullback in the near… Read More

We generally stand by a simple rule at StreetAuthority: Find great companies and tune out the market noise. The nation’s top companies deliver shareholder value on a consistent basis, which puts… Read More

In the 1980s and ’90s, an investor theme emerged that likely played a role in a 20-year upward move for the stock market. #-ad_banner-# In that era, baby boomers reached financial maturity, spending hundreds of billions of dollars on housing, leisure, retirement savings plans, transportation and many other categories. Financial pundits sought ways to suggest profitable ways to track baby boomer… Read More

In the 1980s and ’90s, an investor theme emerged that likely played a role in a 20-year upward move for the stock market. #-ad_banner-# In that era, baby boomers reached financial maturity, spending hundreds of billions of dollars on housing, leisure, retirement savings plans, transportation and many other categories. Financial pundits sought ways to suggest profitable ways to track baby boomer spending, coining the phrase “boomer investing.” Of course, as the oldest baby boomers (born right after World War II) are now near retirement, and younger boomers pass their peak spending ages as well, it’s time to shift gears and focus on the next massive demographic trend. The “millennials” or “echo boomers,” mostly born in the ’80s and ’90s, which are set to overtake the economy. How big is this group? Demographers suggest that there are (or were) 77 million baby boomers. The millennials: 82 million. Skinflints… Read More

If you regularly shop at department store chain Kohl’s (NYSE: KSS), you may have spotted an unusual merchandising misstep in the spring of 2012. The retailer, which had built a long-standing reputation for solid designs, good quality and reasonable prices, started to carry less appealing merchandise that spring. Many shoppers browsed but went home empty-handed.#-ad_banner-# Just a few months later, you would have seen this problem appear on Kohl’s financial statements. In the second quarter of its 2012 fiscal year (which ended July 30, 2012), Kohl’s unsold… Read More

If you regularly shop at department store chain Kohl’s (NYSE: KSS), you may have spotted an unusual merchandising misstep in the spring of 2012. The retailer, which had built a long-standing reputation for solid designs, good quality and reasonable prices, started to carry less appealing merchandise that spring. Many shoppers browsed but went home empty-handed.#-ad_banner-# Just a few months later, you would have seen this problem appear on Kohl’s financial statements. In the second quarter of its 2012 fiscal year (which ended July 30, 2012), Kohl’s unsold inventory of goods stood at $3.5 billion, or 83% of that company’s quarterly sales base. Just a year earlier, that percentage stood at 73%. Investors willing to take the time to track this retailer’s inventory levels (as a percentage of sales) were the first ones to realize that Kohl’s was in trouble. By the time the next quarter’s results came out, this balance sheet ratio had swelled to a company record 107%. (What that means… Read More

When the U.S. economy was on the cusp of falling into an abyss in late 2008, companies across the nation collectively decided to cut all unnecessary spending. An uncertain road ahead meant it was time to preserve cash. Of course, these companies eventually loosened up, and as we’ve seen in the past four years, have been buying back massive amounts of their own stock while doling out ever-higher dividends. But there is one area that companies remain quite conservative:… Read More

When the U.S. economy was on the cusp of falling into an abyss in late 2008, companies across the nation collectively decided to cut all unnecessary spending. An uncertain road ahead meant it was time to preserve cash. Of course, these companies eventually loosened up, and as we’ve seen in the past four years, have been buying back massive amounts of their own stock while doling out ever-higher dividends. But there is one area that companies remain quite conservative: capital spending, also known as capital investment or capital expenditures (or capex, for short).#-ad_banner-# Although capital spending has moved up from the crisis-era lows, it still remains far below typical levels. Analysts at Goldman Sachs who have studied the spending patterns see “the U.S. reaching a near 50-year low in private non-residential fixed investment when measured against GDP.” These analysts believe it would take… Read More

Two key issues have been in play in the stock market as we head into the long Labor Day weekend. Read More

When the U.S. economy was on the cusp of falling into an abyss in late 2008, companies across the nation collectively decided to cut all unnecessary spending. An uncertain road ahead meant it was time to preserve cash. Of course, these companies eventually loosened up, and as we’ve seen in the past four years, have been buying back massive amounts of their own stock while doling out ever-higher dividends. But there is one area that companies remain quite conservative:… Read More

When the U.S. economy was on the cusp of falling into an abyss in late 2008, companies across the nation collectively decided to cut all unnecessary spending. An uncertain road ahead meant it was time to preserve cash. Of course, these companies eventually loosened up, and as we’ve seen in the past four years, have been buying back massive amounts of their own stock while doling out ever-higher dividends. But there is one area that companies remain quite conservative: capital spending, also known as capital investment or capital expenditures (or capex, for short).#-ad_banner-# Although capital spending has moved up from the crisis-era lows, it still remains far below typical levels. Analysts at Goldman Sachs who have studied the spending patterns see “the U.S. reaching a near 50-year low in private non-residential fixed investment when measured against GDP.” These analysts believe it would take… Read More

On Aug. 27, the market did something it hasn’t done in more than a year. On both the New York Stock Exchange and the Nasdaq composite index, the number of stocks making new 52-week lows exceeded the number of stocks making new 52-week highs. Although this reversal is leading to a lot of hand-wringing among technical analysts, fundamental… Read More

On Aug. 27, the market did something it hasn’t done in more than a year. On both the New York Stock Exchange and the Nasdaq composite index, the number of stocks making new 52-week lows exceeded the number of stocks making new 52-week highs. Although this reversal is leading to a lot of hand-wringing among technical analysts, fundamental analysts have a different take. Fresh lows can point the way to deep value opportunities — if you heed a few key caveats.#-ad_banner-# First, you need to be sure that the stocks making fresh lows already fully reflect a period of weakness to come. If the estimates for the next quarter still look too high, then you may as well be patient until those decks have been cleared. Second, you want to be sure that they sport value metrics that represent real value. There is a wide variety of stocks that have fallen sharply in the past few weeks and… Read More

As the Federal Reserve gets set to end its massive multi-year stimulus program, emerging markets are shuddering. That’s because the possibility of imminent Fed “tapering” is leading many investors to yank their money out of emerging-market stocks and bonds and placing them in higher-yielding U.S. bonds. I recently wrote about the burgeoning appeal of emerging-market stocks, which are currently in turmoil but starting to look like deep value plays for long-term investors. Still, until… Read More

As the Federal Reserve gets set to end its massive multi-year stimulus program, emerging markets are shuddering. That’s because the possibility of imminent Fed “tapering” is leading many investors to yank their money out of emerging-market stocks and bonds and placing them in higher-yielding U.S. bonds. I recently wrote about the burgeoning appeal of emerging-market stocks, which are currently in turmoil but starting to look like deep value plays for long-term investors. Still, until these markets settle down and form a bottom, it’s wiser to nibble than go whole hog.#-ad_banner-# Yet when it comes to emerging-market bonds, there is a different set of factors to consider. They are interrelated and can help determine which bonds are safe — and which are potentially toxic. Those three factors: trade balances, foreign currency reserves and currency changes. Let’s take a closer look. Surplus Or Deficit? A nation’s trade balance… Read More