Any shareholder of a company that has been bought out can tell you that takeovers are often lucrative propositions, often delivering quick double-digit gains. But overall, acquisitions have a reputation for destroying shareholder value at the acquiring company. Studies place the failure rate at between 60% and… Read More

There is a whole range of ways to value a company, from its price-to-earnings (P/E) ratio to its Return on Equity (ROE). Yet investors should really be focused on free cash flow (… Read More

The risky part of investors blindly counting on long-standing hot streaks is that when the streaks finally turn cold, the fallout is enormous. On the flipside, the resumption of those winning streaks makes for incredible turnaround stories. There’s no better example… Read More

Like most investors, I’m usually looking for the safest and most attractive income streams. I search for stocks offering the highest yields, most reliable income and best opportunities for dividend growth. But there is a flip side to this bright picture. Some stocks look like safe income plays on the surface, but are really ticking time bombs. These stocks pay out more in dividends than they earn. Eventually, funds run out and they are forced to cut the dividend. For this reason, every income investor should know the warning signs of a… Read More

Like most investors, I’m usually looking for the safest and most attractive income streams. I search for stocks offering the highest yields, most reliable income and best opportunities for dividend growth. But there is a flip side to this bright picture. Some stocks look like safe income plays on the surface, but are really ticking time bombs. These stocks pay out more in dividends than they earn. Eventually, funds run out and they are forced to cut the dividend. For this reason, every income investor should know the warning signs of a stock in danger of a dividend cut. The most obvious sign is a dividend payout at or near 100% of earnings. That means every penny the company makes is supporting the dividend — nothing is left over to re-invest in the business or pay back loans. There are other danger signs to watch out for as well. Earnings power is key. If a company can’t grow earnings, odds are that dividend growth will stall as well. Companies with large amounts of debt are especially risky, since… Read More

Once a quarter, investors take note of a wide range of buying and selling by company insiders. These folks can only buy and sell the stock of their respective company for a fixed period after earnings have been released. With many companies rolling out quarterly results about a month… Read More

It always pays to scroll through stocks that have taken a recent pounding, Most of the time, they’ve deserved to take a hit. But sometimes, investors simply over-react to seemingly bad news. And that creates opportunity. Let’s take a look at four stocks from the Russell 2000,… Read More

Not many people have heard of the Defense Advanced Research Projects Agency, DARPA for short, much less know what it does. But this little-known government agency was created by the Department of Defense in the late 1950s to ensure the U.S. military’s technical superiority. Even more interesting to investors, it… Read More

Uncle Sam’s decision to unload its remaining block of 2.4 billion common shares of Citigroup (NYSE: C) — one quarter ahead of time — has caused many to take a fresh look at the banking titan. A quick survey of analysts’ opinions reveals a stock with +15% or +20%… Read More

We just endured a recession that was the worst since the Great Depression. Since the recession ended, the economic recovery has been weak to say the least. Forecasts for economic growth in 2011 and 2012 are hardly awe inspiring. While anything can happen and the stock… Read More

If you started the year with three wishes and one of them was for more consistency from the energy sector, you wasted a wish. Although many energy stocks are up this year, by double-digits in some cases, others are flat and still others are down (also by double-digits in some… Read More