A few years ago, bank stocks were among the most unloved investments. Many of them traded well below book value and also sported low price-to-earnings multiples. Yet a pair of factors has led investors to rapidly warm up to bank stocks. First, the global economic crisis no longer seems to be a… Read More

A few years ago, bank stocks were among the most unloved investments. Many of them traded well below book value and also sported low price-to-earnings multiples. Yet a pair of factors has led investors to rapidly warm up to bank stocks. First, the global economic crisis no longer seems to be a mortal threat to bank’s balance sheets. A long-anticipated crisis simply never came to pass. Second, a sense that the U.S. housing market — a key source of bank profits — was on the mend, has led to expectations of a brightening profit forecast. Indeed, second-quarter results are in from the major banks, and they look quite solid. A Solid Quarter For Leading Banks As a result, after a 20% surge in the first half of this… Read More

A few years ago, bank stocks were among the most unloved investments. Many of them traded well below book value and also sported low price-to-earnings multiples. Yet a pair of factors has led investors to rapidly warm up to bank stocks. First, the global economic crisis no longer seems to be a… Read More

A few years ago, bank stocks were among the most unloved investments. Many of them traded well below book value and also sported low price-to-earnings multiples. Yet a pair of factors has led investors to rapidly warm up to bank stocks. First, the global economic crisis no longer seems to be a mortal threat to bank’s balance sheets. A long-anticipated crisis simply never came to pass. Second, a sense that the U.S. housing market — a key source of bank profits — was on the mend, has led to expectations of a brightening profit forecast. Indeed, second-quarter results are in from the major banks, and they look quite solid. A Solid Quarter For Leading Banks As a result, after a 20% surge in the first half of this… Read More

A few years ago, bank stocks were among the most unloved investments. Many of them traded well below book value and also sported low price-to-earnings multiples. Yet a pair of factors has led investors to rapidly warm up to bank stocks. First, the global economic crisis no longer seems to be a… Read More

A few years ago, bank stocks were among the most unloved investments. Many of them traded well below book value and also sported low price-to-earnings multiples. Yet a pair of factors has led investors to rapidly warm up to bank stocks. First, the global economic crisis no longer seems to be a mortal threat to bank’s balance sheets. A long-anticipated crisis simply never came to pass. Second, a sense that the U.S. housing market — a key source of bank profits — was on the mend, has led to expectations of a brightening profit forecast. Indeed, second-quarter results are in from the major banks, and they look quite solid. A Solid Quarter For Leading Banks As a result, after a 20% surge in the first half of this… Read More

Less than a decade ago, Petrobras (NYSE: PBR) was the hottest oil company on the planet. A massive offshore discovery led the residents of Sao Paolo and Rio de Janeiro to dance in the streets, looking ahead to the day when all that oil money would circulate through the economy.  Yet year after year, Petrobras has managed to disappoint its backers in new and novel ways. The oil giant vastly overspent to get those big oil fields ready for production,… Read More

Less than a decade ago, Petrobras (NYSE: PBR) was the hottest oil company on the planet. A massive offshore discovery led the residents of Sao Paolo and Rio de Janeiro to dance in the streets, looking ahead to the day when all that oil money would circulate through the economy.  Yet year after year, Petrobras has managed to disappoint its backers in new and novel ways. The oil giant vastly overspent to get those big oil fields ready for production, the Brazilian government sought onerous levels of taxes from the company, and investors had to sit idly by as the company issued massive blocks of new shares, leading to hefty dilution. Just how badly did things turn out? Back in 2007, before Petrobras began the heavy lifting to start production on its major new oil fields, the company had 23% operating margins and earnings per share of around $3. Read More

For nearly two years, investors have had to climb a wall of worry with regards to airline stocks. #-ad_banner-#Back then, I suggested that my favorite industry operator, Delta Airlines (NYSE: DAL) was poised to double and the subsequent 145% gain has led a group that has fared quite well. Simply put, investors were ignoring the too-low price-to-earnings ratios, and instead focused on the trauma that airline stocks had… Read More

For nearly two years, investors have had to climb a wall of worry with regards to airline stocks. #-ad_banner-#Back then, I suggested that my favorite industry operator, Delta Airlines (NYSE: DAL) was poised to double and the subsequent 145% gain has led a group that has fared quite well. Simply put, investors were ignoring the too-low price-to-earnings ratios, and instead focused on the trauma that airline stocks had induced in the past as they shifted in and out of bankruptcy. These carriers’ financial position is so much stronger than in the past that AMR may well be the last industry bankruptcy we see for a very long time. Just four months ago, I reiterated my ardor for Delta, and the carrier subsequently raised June quarter guidance in mid-June, thanks to falling jet fuel prices. But quite suddenly, Delta and its peers look a lot less enticing. This chart should… Read More

China’s economy is slowing, Brazilian and Turkish citizens are in revolt, and commodity prices have fallen sharply. It’s no wonder that investors have pulled millions out of emerging market funds in the past few months. Yet it’s unwise to paint these markets with a broad brush. They may be experiencing sporadic hiccups, but they still possess one of the most dynamic investment themes of the early 21st century:… Read More

China’s economy is slowing, Brazilian and Turkish citizens are in revolt, and commodity prices have fallen sharply. It’s no wonder that investors have pulled millions out of emerging market funds in the past few months. Yet it’s unwise to paint these markets with a broad brush. They may be experiencing sporadic hiccups, but they still possess one of the most dynamic investment themes of the early 21st century: rising middle classes that are fueling steady gains in consumer spending.#-ad_banner-# Let’s look at China as an example. The world’s second-largest economy had been witnessing double-digit gains in consumer spending, though the Chinese government just announced that the growth rate slowed to 6.5% in the second quarter of 2013. Developed economies in North America would love to generate that level of growth. Take Indonesia as another example. As I noted earlier this month, auto sales rose 17.8% in the first quarter of this… Read More

When I received my MBA 20 years ago, I thought I was pretty well versed in the world of finance. But when I got to Wall Street that summer, I was quickly overwhelmed. A litany of phrases were tossed out that I never read about in my finance textbooks. Here’s just a small sample of investing phrases that they never talked about in b-school. “I’m looking for the stock to consolidate from here.”… Read More

When I received my MBA 20 years ago, I thought I was pretty well versed in the world of finance. But when I got to Wall Street that summer, I was quickly overwhelmed. A litany of phrases were tossed out that I never read about in my finance textbooks. Here’s just a small sample of investing phrases that they never talked about in b-school. “I’m looking for the stock to consolidate from here.” Translation: I expect this stock to start falling and wouldn’t want to buy it. This is a similar sentiment to a Wall Street downgrade from “buy” to “neutral” or “hold.” Such downgrades actually mean a stock is very unappealing and bound to fall in price. Analysts use that code to avoid the dreaded “sell” rating, which can alienate them from the companies they follow.     “I smell a secondary.” A… Read More

China’s economy is slowing, Brazilian and Turkish citizens are in revolt, and commodity prices have fallen sharply. It’s no wonder that investors have pulled millions out of emerging market funds in the past few months. Yet it’s unwise to paint these markets with a broad brush. They may be experiencing sporadic hiccups, but they still possess one of the most dynamic investment themes of the early 21st century:… Read More

China’s economy is slowing, Brazilian and Turkish citizens are in revolt, and commodity prices have fallen sharply. It’s no wonder that investors have pulled millions out of emerging market funds in the past few months. Yet it’s unwise to paint these markets with a broad brush. They may be experiencing sporadic hiccups, but they still possess one of the most dynamic investment themes of the early 21st century: rising middle classes that are fueling steady gains in consumer spending.#-ad_banner-# Let’s look at China as an example. The world’s second-largest economy had been witnessing double-digit gains in consumer spending, though the Chinese government just announced that the growth rate slowed to 6.5% in the second quarter of 2013. Developed economies in North America would love to generate that level of growth. Take Indonesia as another example. As I noted earlier this month, auto sales rose 17.8% in the first quarter of this… Read More

It took awhile, but the IPO market is heating up.  Recent deals have performed so well that investment bankers are hustling the next crop up to the starting gate at a rapid pace. You can’t blame them. A shift in the markets can shut the IPO market down, so these firms and their bankers are looking to strike while the iron is hot. Of course, investors only have access to these deals if they have a brokerage account with one of… Read More

It took awhile, but the IPO market is heating up.  Recent deals have performed so well that investment bankers are hustling the next crop up to the starting gate at a rapid pace. You can’t blame them. A shift in the markets can shut the IPO market down, so these firms and their bankers are looking to strike while the iron is hot. Of course, investors only have access to these deals if they have a brokerage account with one of the company’s underwriters. If you have accounts with any investment banks, it pays to give your broker a call and see what deals the firm is underwriting. #-ad_banner-#Expecting triple-digit gains (sometimes in a matter of weeks) — as these IPOs have generated — is unrealistic. But as long as the stock market stays aloft, many coming IPOs could easily tack on 20% to 40% in… Read More

It took awhile, but the IPO market is heating up.  Recent deals have performed so well that investment bankers are hustling the next crop up to the starting gate at a rapid pace. You can’t blame them. A shift in the markets can shut the IPO market down, so these firms and their bankers are looking to strike while the iron is hot. Of course, investors only have access to these deals if they have a brokerage account with one of… Read More

It took awhile, but the IPO market is heating up.  Recent deals have performed so well that investment bankers are hustling the next crop up to the starting gate at a rapid pace. You can’t blame them. A shift in the markets can shut the IPO market down, so these firms and their bankers are looking to strike while the iron is hot. Of course, investors only have access to these deals if they have a brokerage account with one of the company’s underwriters. If you have accounts with any investment banks, it pays to give your broker a call and see what deals the firm is underwriting. #-ad_banner-#Expecting triple-digit gains (sometimes in a matter of weeks) — as these IPOs have generated — is unrealistic. But as long as the stock market stays aloft, many coming IPOs could easily tack on 20% to 40% in… Read More