One of the surprises, at least on the surface, of the market’s recent swoon was the outperformance of consumer discretionary stocks. This group usually leads to the downside, not the upside, when the market is weak. Consumer staples stocks, on the other hand, usually do relatively well in times of turbulence. So when both of these groups outperform, there has to be something else in play. Although I am not an economist, it appears that consumers are going to be beneficiaries of prolonged lower energy prices. On the charts, one stock with solid potential is retailer Bed, Bath… Read More

One of the surprises, at least on the surface, of the market’s recent swoon was the outperformance of consumer discretionary stocks. This group usually leads to the downside, not the upside, when the market is weak. Consumer staples stocks, on the other hand, usually do relatively well in times of turbulence. So when both of these groups outperform, there has to be something else in play. Although I am not an economist, it appears that consumers are going to be beneficiaries of prolonged lower energy prices. On the charts, one stock with solid potential is retailer Bed, Bath & Beyond (NASDAQ: BBBY).  It began this year on a very sour note, but managed to turn itself around in June. From there, the trend has been quite bullish, and there is still more room to run. As we can see on the chart, BBBY gapped down in January. After a failed recovery attempt in February and March, it gapped down again.   #-ad_banner-#On June 26, it experienced the final washout as it gapped down for a third time on exceptionally heavy volume, only to close near that day’s high. On a… Read More

There’s an expression that goes, “the higher the risk, the higher the reward.” For example, some see risky micro-caps as one of the only ways to reap rapid big gains in a stock. Well, what if you could get the big reward, without having to take on enormous risk? It’s not easy, but it’s not impossible either. #-ad_banner-#In fact, in his Top 10 Stocks newsletter, my colleague Dave Forest recently discussed the qualities that he looks for when in search of up-and-coming winners. Dave wrote: “The qualities that make businesses great inevitably come down to a few basic themes —… Read More

There’s an expression that goes, “the higher the risk, the higher the reward.” For example, some see risky micro-caps as one of the only ways to reap rapid big gains in a stock. Well, what if you could get the big reward, without having to take on enormous risk? It’s not easy, but it’s not impossible either. #-ad_banner-#In fact, in his Top 10 Stocks newsletter, my colleague Dave Forest recently discussed the qualities that he looks for when in search of up-and-coming winners. Dave wrote: “The qualities that make businesses great inevitably come down to a few basic themes — the kind of check-list items that we can reliably look for in stocks both famous and completely unknown, to determine whether they might suddenly deliver outperformance…” Dave pointed out six basic themes that, when all are possessed by a company, make it a “must-buy.” The first step to finding the right company is to focus on firms that aren’t too big or too small. Obscure startups — with micro-sized market caps — can generate innovative ideas, but often have shaky financials due to their nature as a young business. At the other end of the spectrum, industry giants can offer… Read More

Thanks to major changes in regulation, social media and technology, the business of banking has undergone radical change since the Great Recession of 2008.  And one key area of change has been in the field of lending. Skittish loan officers and costly new banking regulations have limited growth in consumer lending since the end of the recession.  These factors created an opening for an entirely new breed of banker: Every day consumers, many of whom have cash to lend out to peers.  Loan originations on peer lending platforms have been growing at an annualized rate of 100% or… Read More

Thanks to major changes in regulation, social media and technology, the business of banking has undergone radical change since the Great Recession of 2008.  And one key area of change has been in the field of lending. Skittish loan officers and costly new banking regulations have limited growth in consumer lending since the end of the recession.  These factors created an opening for an entirely new breed of banker: Every day consumers, many of whom have cash to lend out to peers.  Loan originations on peer lending platforms have been growing at an annualized rate of 100% or more since 2012. Compare this with an annual growth of 4% or less in traditional consumer credit at depository banks and you begin to see where lending is going in America. The idea of peer lending could not be simpler. You have actually been doing it — on an indirect basis — for quite some time. Banks use your deposits into checking and saving accounts as a source of funding for fresh loans. The peer lending platforms cut out the middleman and enable consumers to make direct loans to borrowers.  This finance niche has clearly arrived in the… Read More

October 17th was a good day for investors. The Dow, reeling from a six-day slide, rebounded with a powerful 250-point gain. But for one small group of stockholders it was an especially great day. Shares of Equinix, Inc. (Nasdaq: EQIX) rocketed more than $16 per share, hitting $208.59 in heavy trading. #-ad_banner-#This pop was triggered by the declaration of a dividend… but not just any dividend.    The board approved a one-time special dividend payment of $7.57 per share in connection with the firm’s restructuring into a… Read More

October 17th was a good day for investors. The Dow, reeling from a six-day slide, rebounded with a powerful 250-point gain. But for one small group of stockholders it was an especially great day. Shares of Equinix, Inc. (Nasdaq: EQIX) rocketed more than $16 per share, hitting $208.59 in heavy trading. #-ad_banner-#This pop was triggered by the declaration of a dividend… but not just any dividend.    The board approved a one-time special dividend payment of $7.57 per share in connection with the firm’s restructuring into a real estate investment trust (REIT). This isn’t the only cash windfall that EQIX shareholders will be receiving. The company, which owns large data centers, is planning another special dividend in 2015 that will be even larger. It’s no wonder why the shares continue to attract attention, up almost 10% since the original announcement. This is the type of situation that investors love to be involved with. In fact, subscribers of my premium advisory service High-Yield Investing were able to cash in from the same exact scenario recently with a stock I… Read More

Talk about a lousy way to start the day. #-ad_banner-#Each morning, even when he’s on vacation, the President of the United States sits with top intelligence officials, usually in the Oval Office, to review the President’s Daily Brief. This is a classified document that lists potential threats against the United States. It contains the latest in intercepted communications, satellite imagery, human intelligence and analysis from the nation’s top security agencies. If you wonder what’s been turning Obama’s hair gray — or what did it to Bush and Clinton — it’s this… Read More

Talk about a lousy way to start the day. #-ad_banner-#Each morning, even when he’s on vacation, the President of the United States sits with top intelligence officials, usually in the Oval Office, to review the President’s Daily Brief. This is a classified document that lists potential threats against the United States. It contains the latest in intercepted communications, satellite imagery, human intelligence and analysis from the nation’s top security agencies. If you wonder what’s been turning Obama’s hair gray — or what did it to Bush and Clinton — it’s this nettlesome little report. Being the leader of the free world has its perks, but this isn’t one of them. Most of the threats against national security detailed in this report are handled by the government. However, in order to address the country’s top threat, which I will talk more about in a minute, the government will need to rely on a burgeoning industry that investors can capitalize on today. The president receives this information as Washington begins its day. Over on C Street, just west of John Marshall Park, the staffers at… Read More

Investors have been warming up to bank stocks in a big way.  The KBW Bank Index jumped 50% over the past two years, and a brightening economy suggests further good times ahead for the industry.                                                        Yet looks are deceiving. A series of regulatory changes actually portend tougher days ahead.   Wells Fargo & Co. (NYSE: WFC), which has been repeatedly cited by Warren Buffett as America’s best-run bank, should buck the head-winds. Frankly, it’s the only bank stock you should have in your portfolio right now.   Still Tweaking The Regulations Dodd-Frank regulation is… Read More

Investors have been warming up to bank stocks in a big way.  The KBW Bank Index jumped 50% over the past two years, and a brightening economy suggests further good times ahead for the industry.                                                        Yet looks are deceiving. A series of regulatory changes actually portend tougher days ahead.   Wells Fargo & Co. (NYSE: WFC), which has been repeatedly cited by Warren Buffett as America’s best-run bank, should buck the head-winds. Frankly, it’s the only bank stock you should have in your portfolio right now.   Still Tweaking The Regulations Dodd-Frank regulation is the most comprehensive reform of the banking industry since the Great Depression. It’s so detailed that only 220 of the 398 required rules have been finalized.   The move away from institutional credit ratings for risk-based capital will mean larger due diligence departments for  banks of all sizes. One local bank surveyed by the Washington Post reported a seven-fold increase in its compliance team. Mergers between smaller banks are increasing to better handle the regulatory burden. And in the quarters ahead, the  regulatory burden will only grow greater.   On top of existing regulations put in place… Read More

       Haste makes waste. That’s the possible view on the corner offices at software giant Oracle Corp. (Nasdaq: ORCL), which seems to have taken its sweet time in embracing cloud computing.   Now, management appears to have a clear vision of how it wants the firm to be positioned in the “cloud.” Cloud software is loosely defined as the migration of data storage and analytics to the public internet and away from private, local servers.   To be sure, the $38.5 billion (in revenue) behemoth is well behind cloud leaders like Google, Inc. (NASDAQ: GOOGL), Amazon.com, Inc. (NASDAQ:… Read More

       Haste makes waste. That’s the possible view on the corner offices at software giant Oracle Corp. (Nasdaq: ORCL), which seems to have taken its sweet time in embracing cloud computing.   Now, management appears to have a clear vision of how it wants the firm to be positioned in the “cloud.” Cloud software is loosely defined as the migration of data storage and analytics to the public internet and away from private, local servers.   To be sure, the $38.5 billion (in revenue) behemoth is well behind cloud leaders like Google, Inc. (NASDAQ: GOOGL), Amazon.com, Inc. (NASDAQ: AMZN) and Microsoft Corp. (NASDAQ: MSFT); however, its vast resources and huge customer base make it a good bet to become a top player in what’s still an emerging industry.   What’s more, Oracle doesn’t have to make the transition overnight.   #-ad_banner-#What investors sometimes forget is the broader movement to the cloud is still relatively new and will be a multi-year process. So Oracle’s traditional business remains an enormous asset. In fact, the firm still has 310,000 database customers and about nine in 10 of these renew each year.   As a result, things like software… Read More

There is a classic conundrum facing dividend-focused investors: Income or capital appreciation?   The iShares Select Dividend ETF (NYSE: DVY) is a classic example. It delivers a 3% yield and relatively low volatility, but has underperformed the iShares S&P 500 Growth Fund (NYSE: IVW) by roughly 40 percentage points  over the past ten years on  a total return basis.      A decent yield is always nice, but a 40% gap is too large to ignore.   There is one way to get the best of both worlds. The secret is what type of income stocks you… Read More

There is a classic conundrum facing dividend-focused investors: Income or capital appreciation?   The iShares Select Dividend ETF (NYSE: DVY) is a classic example. It delivers a 3% yield and relatively low volatility, but has underperformed the iShares S&P 500 Growth Fund (NYSE: IVW) by roughly 40 percentage points  over the past ten years on  a total return basis.      A decent yield is always nice, but a 40% gap is too large to ignore.   There is one way to get the best of both worlds. The secret is what type of income stocks you focus on.   Many  dividend-paying companies operate in mature industries with slower sales growth and competitive environments. Such dynamics often generate solid cash flow, but high payout ratios and saturated markets mean little in the way of stock price appreciation.   Find one of these cash machines with new growth engines and you’ve got yourself a stock that could be the best of both worlds.   A Cash Machine With Nowhere To Go For years, the U.S. telecom sector has been the model of slow-growth dividend stocks. Despite fairly reliable cash yields, the iShares U.S. Telecommunications ETF (NYSE: IYZ), for… Read More

Europeans have a clear case of high-tech envy. American companies like Apple, Inc. (Nasdaq: AAPL), Amazon.com, Inc. (Nasdaq: AMZN), The Priceline Group, Inc. (Nasdaq: PCLN) and Netflix, Inc. (Nasdaq: NFLX) are building major market share across Europe, while homegrown tech stars are few and far between. Paris-based Criteo (Nasdaq: CRTO) would like to change that perception. Not only is the company in the midst of robust growth, but it is outperforming many of its U.S.-based rivals. And its shares, which have fallen by more than one-third from the 52-week high, sport an impressive GARP (growth at… Read More

Europeans have a clear case of high-tech envy. American companies like Apple, Inc. (Nasdaq: AAPL), Amazon.com, Inc. (Nasdaq: AMZN), The Priceline Group, Inc. (Nasdaq: PCLN) and Netflix, Inc. (Nasdaq: NFLX) are building major market share across Europe, while homegrown tech stars are few and far between. Paris-based Criteo (Nasdaq: CRTO) would like to change that perception. Not only is the company in the midst of robust growth, but it is outperforming many of its U.S.-based rivals. And its shares, which have fallen by more than one-third from the 52-week high, sport an impressive GARP (growth at a reasonable price) value proposition. #-ad_banner-#At first blush, Criteo may seem to be just another internet advertising company. Companies like Rocket Fuel, Inc. (Nasdaq: FUEL), The Rubicon Project, Inc. (Nasdaq: RUBI) and even almighty Google, Inc. (Nasdaq: GOOG) are adept at matching web surfers with relevant, targeted ads. But Criteo goes one step further, offering the kind of cloud-based “Big Data” analytics that has helped firms like Splunk, Inc. (Nasdaq: SPLK) and Tableau Software, Inc. (Nasdaq: DATA) garner lush market values in excess of $5 billion. As analysts at Goldman Sachs note, in prose that only a financial professional could… Read More

Despite the incredible, often life-saving benefits of medical devices such as pacemakers, stents, catheters, implants, etc., the companies who manufacture them have a big tax bull’s-eye on their backs courtesy of Obamacare. The Affordable Care Act (ACA) has a provision in it called the medical device tax, which is a 2.3% excise tax on a wide variety of medical devices, including most of the products sold by one of the biggest, and in my view, best, companies in the space: Medtronic (NYSE: MDT). Fortunately for Medtronic, and partially because of the industry’s aggressive lobbying, the medical device tax… Read More

Despite the incredible, often life-saving benefits of medical devices such as pacemakers, stents, catheters, implants, etc., the companies who manufacture them have a big tax bull’s-eye on their backs courtesy of Obamacare. The Affordable Care Act (ACA) has a provision in it called the medical device tax, which is a 2.3% excise tax on a wide variety of medical devices, including most of the products sold by one of the biggest, and in my view, best, companies in the space: Medtronic (NYSE: MDT). Fortunately for Medtronic, and partially because of the industry’s aggressive lobbying, the medical device tax could soon be erased from Obamacare. That’s because, in a rare display of bipartisanship in Congress, lawmakers from both sides of the political aisle want to repeal the tax. #-ad_banner-# In fact, a recent Washington Post article called the repeal “one of Washington’s top priorities” and actually mentioned Medtronic by name, as the Minnesota-based company has its two Democrat senators, Al Franken and Amy Klobuchar, on record supporting it. The repeal is almost certainly going to become an even… Read More