Healthcare has been the market’s best-performing sector during the past five years, with many stocks rising 200% or more. However, investors shouldn’t assume that the sector has been fully exploited. While many healthcare stocks have probably topped out for now, others still have room to run.  For outsized gain potential in the coming years, consider a relatively small, but innovative, medical device company called Natus Medical, Inc. (Nasdaq: BABY). Shares of Natus have been on fire, thanks to success in the firm’s two main markets, neurology and newborn care. Yet the promise of more growth, with the help of several… Read More

Healthcare has been the market’s best-performing sector during the past five years, with many stocks rising 200% or more. However, investors shouldn’t assume that the sector has been fully exploited. While many healthcare stocks have probably topped out for now, others still have room to run.  For outsized gain potential in the coming years, consider a relatively small, but innovative, medical device company called Natus Medical, Inc. (Nasdaq: BABY). Shares of Natus have been on fire, thanks to success in the firm’s two main markets, neurology and newborn care. Yet the promise of more growth, with the help of several encouraging new ventures, should propel Natus well beyond its current market value of $1.2 billion. Founded in 1989, Natus first made its mark in neurology by providing tests for the detection and  monitoring of epilepsy, Alzheimer’s disease and many other neurological disorders. The firm offers multiple varieties of (and adjuncts to) three such tests: electroencephalography (EEG), electromyography (EMG) and polysomnography (PSG). In a key competitive advantage, these devices typically run on proprietary software or algorithms, which confer unique features, such as a seizure detection program that enables faster, more accurate EEG interpretation. Accuracy is further boosted by a… Read More

In the most recent weekly survey conducted by the American Association of Individual Investors, investor sentiment is at a multi-year low, thanks to soft first-quarter economic and earnings data. Sentiment may worsen even further if predictions of a weaker-than-expected second quarter prove accurate. With the mood souring, a bullish outlook might seem out of touch, especially coming from an economically sensitive industry like truck manufacturing. But I certainly wouldn’t characterize management at commercial truck maker Paccar, Inc. (Nasdaq: PCAR) as out of touch. In fact, they are very bullish. And why not? The nation’s second-largest producer of heavy-duty trucks (mainly… Read More

In the most recent weekly survey conducted by the American Association of Individual Investors, investor sentiment is at a multi-year low, thanks to soft first-quarter economic and earnings data. Sentiment may worsen even further if predictions of a weaker-than-expected second quarter prove accurate. With the mood souring, a bullish outlook might seem out of touch, especially coming from an economically sensitive industry like truck manufacturing. But I certainly wouldn’t characterize management at commercial truck maker Paccar, Inc. (Nasdaq: PCAR) as out of touch. In fact, they are very bullish. And why not? The nation’s second-largest producer of heavy-duty trucks (mainly the class 8 “big rigs” it sells under the well-known Kenworth and Peterbilt brands) has seen a robust rebound in sales trends in recent years. Sales approached $19 billion in 2014,  more than double the recession low of $8 billion and an all-time company record. Paccar is off to strong start this year. During the Q1 conference call in April, management reported sales and earnings that handily beat estimates. They also raised their full-year estimate for industrywide class 8 truck sales in the United States and Canada to 260,000-to-290,000 units, versus an earlier projection for unit sales of 250,000-to-280,000. That… Read More

Millions of Americans remain absent from the workforce, and even those with jobs are wrestling with stagnant income growth. That helps explain why retailers have experienced a half decade of subpar sales growth. Yet that bleak recent history may soon be coming to an end. Wages, job openings and retail spending are inter-locking variables, and for a change, these factors are pointing to brighter days ahead. Of course it all starts with jobs. As we saw with the most recent employment report, the national unemployment rate stands firmly below 6%, a threshold that seemed almost inconceivable just a few years… Read More

Millions of Americans remain absent from the workforce, and even those with jobs are wrestling with stagnant income growth. That helps explain why retailers have experienced a half decade of subpar sales growth. Yet that bleak recent history may soon be coming to an end. Wages, job openings and retail spending are inter-locking variables, and for a change, these factors are pointing to brighter days ahead. Of course it all starts with jobs. As we saw with the most recent employment report, the national unemployment rate stands firmly below 6%, a threshold that seemed almost inconceivable just a few years ago.     Favorable Employment Trends Source: Bureau of Labor Statistics​ Despite the robust period of job creation, employees still lacked any leverage when it came time to seek wages. Yet that dynamic may be changing. Wages in the private sector grew 2.8% in the first quarter, the best showing since 2008. That may not seem like a big jump, but the trend is encouraging. Early signs of wage growth may be having an impact on consumers. According to the University of Michigan, consumer sentiment just rose to… Read More

For the companies that own cellphone towers, business has been brisk. American Tower Corp. (NYSE: AMT), SBA Communications Corp. (Nasdaq: SBAC) and Crown Castle International Corp. (NYSE: CCI) have generated 17%-to-22% compound annual sales growth over the past five years.   The business model is fairly simple. Each cell tower can handle equipment and traffic for as many as four or five telecom carriers and transmit a signal anywhere from 22 to 45 miles. Leases of ten years and annual rent increases of around 3% mean the towers are great cash flow machines. #-ad_banner-#As telecom carriers race to compete and… Read More

For the companies that own cellphone towers, business has been brisk. American Tower Corp. (NYSE: AMT), SBA Communications Corp. (Nasdaq: SBAC) and Crown Castle International Corp. (NYSE: CCI) have generated 17%-to-22% compound annual sales growth over the past five years.   The business model is fairly simple. Each cell tower can handle equipment and traffic for as many as four or five telecom carriers and transmit a signal anywhere from 22 to 45 miles. Leases of ten years and annual rent increases of around 3% mean the towers are great cash flow machines. #-ad_banner-#As telecom carriers race to compete and raise money selling off their tower infrastructure, they’re finding eager buyers in the tower operators. Verizon Communications, Inc. (NYSE: VZ) announced a long-term lease and sale of 11,500 towers, one of the last remaining large carrier portfolios, to American Tower in February for $5.06 billion. Since cash flows are all but certain, debt is easy to come by and tower operators are loading up to make capital investments for years to come. American Tower has more than two-thirds of its capital structure (68%) in debt and a BBB credit rating by Morningstar, just one level above non-investment grade. Crown Castle… Read More

Later this year, there will be a rare passing of the demographic baton, as millennials surpass the baby boomers as the nation’s largest living generation. Millennials are those born from 1981 to 1997, while the baby boomer generation arose from 1946 to 1964. By year end, there will be more than 75 million millennials and just under 75 million baby boomers, according to projections by the Pew Research Center, a Washington, DC-based think tank. Moreover, that gap will widen over time, thanks to immigration and an eventual reduction in the number of baby boomers. For investors,… Read More

Later this year, there will be a rare passing of the demographic baton, as millennials surpass the baby boomers as the nation’s largest living generation. Millennials are those born from 1981 to 1997, while the baby boomer generation arose from 1946 to 1964. By year end, there will be more than 75 million millennials and just under 75 million baby boomers, according to projections by the Pew Research Center, a Washington, DC-based think tank. Moreover, that gap will widen over time, thanks to immigration and an eventual reduction in the number of baby boomers. For investors, the implications are clear: Millennials are set to become the nation’s main growth engine, taking over the role baby boomers began to assume in the mid-1960s. To be sure, millennials face their share of obstacles to prosperity such as a tepid economy, somewhat gloomy job prospects and, in many cases, heavy student loan debt. But they have two powerful factors in their favor: the sheer size of their generation and the U.S. economy’s renowned resilience. Together, these factors should translate to progressively greater spending power, which sooner or later, will rival that of the baby boomers. That backdrop warrants a… Read More

When one group has disproportionate authority over another, there is little leeway for the characteristics that make us uniquely human — carelessness, bigotry, emotion, error in judgment, ignorance. That truth has never been more evident than in recent months, which have been plagued with high-profile incidents of law enforcement fatally using force to apprehend suspected lawbreakers. The deaths of Michael Brown in Ferguson, Missouri and Freddie Gray in Baltimore, Maryland, among others, spurred outcries of police negligence, followed by protests and riots in major cities. #-ad_banner-#The trouble arises when an officer resorts to violence, but there is little or no… Read More

When one group has disproportionate authority over another, there is little leeway for the characteristics that make us uniquely human — carelessness, bigotry, emotion, error in judgment, ignorance. That truth has never been more evident than in recent months, which have been plagued with high-profile incidents of law enforcement fatally using force to apprehend suspected lawbreakers. The deaths of Michael Brown in Ferguson, Missouri and Freddie Gray in Baltimore, Maryland, among others, spurred outcries of police negligence, followed by protests and riots in major cities. #-ad_banner-#The trouble arises when an officer resorts to violence, but there is little or no evidence to substantiate or discredit the need for an escalation in tactics. This often leads investigators to rely on eyewitness testimony and official police statements, both of which have potential for biases. Incidents like this foster distrust in the justice system and in the police. This is not a new problem, but it is one that finally has a solution. The answer: offer nonlethal weapons and hold all parties accountable by strapping a camera to every officer. A recent study by the San Diego Police Department concluded that the presence of body cameras reduced complaints against… Read More

Apple is a “no brainer” investment, and it has been for years. The company’s first quarter earnings for 2015 only drive home that point. The firm’s new products and features are wildly popular, the company is growing sales in markets outside the United States and every year Apple sells a greater quantity of devices than it did the year prior. What’s interesting about Apple is that for all the hype surrounding the company and its products, it still remains undervalued. Consider this: analysts expect Apple to earn $8.79 per share in 2015. That’s a 38.6% increase over the prior year. Read More

Apple is a “no brainer” investment, and it has been for years. The company’s first quarter earnings for 2015 only drive home that point. The firm’s new products and features are wildly popular, the company is growing sales in markets outside the United States and every year Apple sells a greater quantity of devices than it did the year prior. What’s interesting about Apple is that for all the hype surrounding the company and its products, it still remains undervalued. Consider this: analysts expect Apple to earn $8.79 per share in 2015. That’s a 38.6% increase over the prior year. Putting aside for a moment the fact that analysts consistently underestimate Apple’s earnings potential (the company hasn’t had a consensus “miss” on quarterly earnings since 2012), the stock trades at a forward price-to-earnings of 14.6. #-ad_banner-#Companies in the S&P 500 as a whole are expected to grow earnings by 4.2%, giving the broader index a forward multiple of 17.9. So what we have is the largest company by market capitalization expected to outpace the market’s earnings growth this year by more than nine fold, yet it trades at a discount (of more than 18%) to the market. Read More

Turnaround strategies can focus on a variety of factors. Some companies shed lagging divisions, while others pursue acquisitions to jump start growth. For John Chen, the CEO of BlackBerry Ltd. (Nasdaq: BBRY), new product development holds the key. In a recent interview at the Milken Institute Global Conference, Chen said his firm will focus on security, privacy and increasing productivity with its devices. #-ad_banner-#His comments come following a February deal with Google, Inc. (Nasdaq: GOOG) and Amazon.com, Inc. (Nasdaq: AMZN) that will bring hundreds of thousands of new applications to BlackBerry users. Is Chen planning to make more announcements that… Read More

Turnaround strategies can focus on a variety of factors. Some companies shed lagging divisions, while others pursue acquisitions to jump start growth. For John Chen, the CEO of BlackBerry Ltd. (Nasdaq: BBRY), new product development holds the key. In a recent interview at the Milken Institute Global Conference, Chen said his firm will focus on security, privacy and increasing productivity with its devices. #-ad_banner-#His comments come following a February deal with Google, Inc. (Nasdaq: GOOG) and Amazon.com, Inc. (Nasdaq: AMZN) that will bring hundreds of thousands of new applications to BlackBerry users. Is Chen planning to make more announcements that could put the Canadian smartphone company back on top? Or is it just another failed attempt to resuscitate the one-time leader in enterprise services? Chen needs a victory. BlackBerry’s shares have surged and slumped in recent years as potential buyouts, new strategies and new management failed to put the company back on track. Not long ago, BlackBerry was a market leader in the mobile enterprise services category. Now, BlackBerry’s share of the global mobile operating system (OS) market is less than 1% (compared to the 96% market share about evenly controlled by Apple iOS and Android OS devices). Read More

Investors hoping Avon Products Inc. (NYSE: AVP) will stage a big turnaround probably shouldn’t hold their breath. After numerous failed attempts to boost its faltering business, the iconic cosmetics marketer may well be a lost cause. Current media reports about a possible sale of the legacy North American segment are a clear sign of how a once-great company has fallen. Rather than risk an investment in Avon, investors should consider a lesser-known, but far more promising, beauty products retailer: Ulta Salon Cosmetics & Fragrances, Inc. (Nasdaq: ULTA). Founded in 1990, more than a century after Avon, Ulta is seen by… Read More

Investors hoping Avon Products Inc. (NYSE: AVP) will stage a big turnaround probably shouldn’t hold their breath. After numerous failed attempts to boost its faltering business, the iconic cosmetics marketer may well be a lost cause. Current media reports about a possible sale of the legacy North American segment are a clear sign of how a once-great company has fallen. Rather than risk an investment in Avon, investors should consider a lesser-known, but far more promising, beauty products retailer: Ulta Salon Cosmetics & Fragrances, Inc. (Nasdaq: ULTA). Founded in 1990, more than a century after Avon, Ulta is seen by some analysts as the most exciting growth stock in the beauty products industry. During the past three years, annual sales climbed more than 80% to $3.2 billion, net income roughly doubled to $257 million and free cash flow swelled to an all-time high of $148 million. Shares of Ulta rose roughly 70%, well outpacing the broader market. Whereas Avon is built upon a direct sales business model, Ulta takes a more traditional route. Since its founding, the company has established 774 company-owned “big box” retail outlets in 47 states, with plans to open many more in the coming… Read More

No matter how you slice it, $50 billion is a big number. That’s how much money Oracle Corp. (NYSE: ORCL) is rumored to be prepared to pay to acquire Salesforce.com, Inc. (NYSE: CRM), a fast-growing provider of customer relationship management software. Why on earth would Oracle make such a bold move? Because it has hit a growth wall. Oracle’s sales are on track to grow just 1%-to-2% in fiscal (May) 2015 and 2016. Acquiring Salesforce.com would instantly boost the top line by nearly 20%. #-ad_banner-#More importantly, it would enable Oracle’s sales force to peddle existing products to the customers doing… Read More

No matter how you slice it, $50 billion is a big number. That’s how much money Oracle Corp. (NYSE: ORCL) is rumored to be prepared to pay to acquire Salesforce.com, Inc. (NYSE: CRM), a fast-growing provider of customer relationship management software. Why on earth would Oracle make such a bold move? Because it has hit a growth wall. Oracle’s sales are on track to grow just 1%-to-2% in fiscal (May) 2015 and 2016. Acquiring Salesforce.com would instantly boost the top line by nearly 20%. #-ad_banner-#More importantly, it would enable Oracle’s sales force to peddle existing products to the customers doing business with Salesforce.com. And it would open the door for Salesforce’s team of sales reps to open up new leads for its customers. “Cross-selling” as they say in industry parlance. Frankly, Oracle isn’t alone. Many large tech companies are facing limited organic growth prospects, and they are using their bulletproof balance sheets to rejuvenate their business platforms. These large companies have already proven their desire to grow through acquisitions: According to Reuters, about 60% of tech mergers and acquisitions (M&A) volume over the past five years is represented by five acquirers: Facebook, Inc. (Nasdaq: FB), Google, Inc. (Nasdaq: GOOG), Oracle,… Read More