You have to be impressed with the recent 30% six-month rally for chipmaker Intel (Nasdaq: INTC). #-ad_banner-#For a company that was already worth more than $130 billion this past winter, such rapid upside is a rare feat. Credit goes to improving demand for its chips — but this stock is also getting a nice lift from a move to add another $20 billion to an ongoing share buyback programs. Intel has already shrunk its share count by more than 10% over the past three years, and this move could deliver another 10% reduction in shares outstanding. (It would have been… Read More

You have to be impressed with the recent 30% six-month rally for chipmaker Intel (Nasdaq: INTC). #-ad_banner-#For a company that was already worth more than $130 billion this past winter, such rapid upside is a rare feat. Credit goes to improving demand for its chips — but this stock is also getting a nice lift from a move to add another $20 billion to an ongoing share buyback programs. Intel has already shrunk its share count by more than 10% over the past three years, and this move could deliver another 10% reduction in shares outstanding. (It would have been wiser to be more aggressive when shares were really washed out a year ago, but that’s a discussion for another day.) In a similar vein, shares of Cisco Systems (Nasdaq: CSCO) are up an impressive 60% over the past two years, and Cisco has also been a bold acquirer of its own shares: The networking giant has shrunk it share count by more than 1.3 billion over the past eight years, and investors have to come to appreciate the profound impact such a move has on per-share profits. These buyback kings will soon have company. Three major firms are on… Read More

After six months of investors sitting on the edge of their seats, watching tobacco stock prices climb, it’s finally here…  #-ad_banner-#The Big Tobacco merger. The second-largest U.S. tobacco company, Reynolds American (NYSE: RAI), has agreed to buy Lorillard (NYSE: LO), the third-largest U.S. tobacco company, in a deal valued at more than $27 billion. Assuming it passes regulatory scrutiny, the deal is expected to close in the first half of next year. The combined company would dominate the U.S. tobacco market, producing two of the three leading U.S. brands of cigarettes: Camel and Newport. (The top-selling brand, Marlboro, is produced… Read More

After six months of investors sitting on the edge of their seats, watching tobacco stock prices climb, it’s finally here…  #-ad_banner-#The Big Tobacco merger. The second-largest U.S. tobacco company, Reynolds American (NYSE: RAI), has agreed to buy Lorillard (NYSE: LO), the third-largest U.S. tobacco company, in a deal valued at more than $27 billion. Assuming it passes regulatory scrutiny, the deal is expected to close in the first half of next year. The combined company would dominate the U.S. tobacco market, producing two of the three leading U.S. brands of cigarettes: Camel and Newport. (The top-selling brand, Marlboro, is produced by Altria Group (NYSE: MO).) It’s one of the more complicated buyout offers in recent memory, involving four of the five biggest U.S. purveyors of tobacco products. To minimize antitrust issues, Reynolds and Lorillard both will sell assets to Imperial Tobacco Group (OTC: ITYBY). Concurrently, British American Tobacco (NYSE: BTI) plans to purchase a large amount of Reynolds shares. Reynolds American  Key to the acquisition is Reynolds’ reach for Lorillard’s leading menthol brand, Newport, giving it 62% of the menthol market. At a time when traditional cigarette sales are consistently trending downward, menthol cigarettes are both profitable and gaining… Read More

With the market at or near its all-time highs, a number of renowned investors and market commentators have been questioning the market’s valuation over the past month or so.  #-ad_banner-#Billionaire Carl Icahn is the latest to grow wary of the market. “In my mind, it is time to be cautious about the U.S. stock markets,” he said last week. So how do investors prepare for a pullback? The first group of stocks to avoid is the momentum names, which trade on investor optimism, not on the strength of their fundamentals. Stocks that trade at… Read More

With the market at or near its all-time highs, a number of renowned investors and market commentators have been questioning the market’s valuation over the past month or so.  #-ad_banner-#Billionaire Carl Icahn is the latest to grow wary of the market. “In my mind, it is time to be cautious about the U.S. stock markets,” he said last week. So how do investors prepare for a pullback? The first group of stocks to avoid is the momentum names, which trade on investor optimism, not on the strength of their fundamentals. Stocks that trade at outrageous valuations are often the first to be sold if the market takes a turn downward.  Icahn isn’t alone in his caution. Fellow billionaire David Einhorn is short a basket of stocks that trade at outsize valuations. In a Bloomberg interview earlier this year, Einhorn hinted that his targets to short include tech stocks with negligible earnings that are trading above 10 times sales.  Among the stocks that fit this bill are Twitter (NYSE: TWTR), TripAdvisor (Nasdaq: TRIP) and Zillow (Nasdaq: Z).  All three have price-to-sales (P/S) ratios above 15, and all three appear to be… Read More

Looking at a stock in the context of an analyst’s price target can be a tricky endeavor. #-ad_banner-#Most analysts place such targets in the context of where they believe shares will trade in a quarter or two. And that’s not really how you should look at a stock. The focus on near-term quarterly results can be too short-sighted. The most profitable style of investing is to focus on stocks that possess considerable upside (or downside) a year or two down the road. Still, I monitor analysts’ price targets anyway, often in search of a big gap between the current price… Read More

Looking at a stock in the context of an analyst’s price target can be a tricky endeavor. #-ad_banner-#Most analysts place such targets in the context of where they believe shares will trade in a quarter or two. And that’s not really how you should look at a stock. The focus on near-term quarterly results can be too short-sighted. The most profitable style of investing is to focus on stocks that possess considerable upside (or downside) a year or two down the road. Still, I monitor analysts’ price targets anyway, often in search of a big gap between the current price and the target. Anytime you see an analyst suggest a stock is worth 50% or even 100% more than the current share price, it’s surely worth further research. Here are three such stocks that could surge far higher — if analysts are on the mark with their predictions. 1. ZS Pharma (Nasdaq: ZSPH )​ When it comes to pulling off an IPO, timing is everything. A broad range of young biotech companies came public early this year, only to get wiped out in a late winter rout. Many of the biotech stocks that swooned back then are only now regaining… Read More

Believe it or not, France exports much more than soft cheeses and techno bands. Despite the worries about the stability of the European banking system, French bank stocks offer some of the best value I’ve stumbled on recently.  #-ad_banner-#While BNP Paribas (OTC: BNPZY) has grabbed headlines thanks to a $9.8 billion fine related to doing business with countries blacklisted by U.S. regulators, a cleaner name has showed up on my radar…  Credit Agricole (OTC: CRARY). While it’s true that I wrote an article titled “Why I Will Never Buy Another Bank Stock” a few months ago, the focus… Read More

Believe it or not, France exports much more than soft cheeses and techno bands. Despite the worries about the stability of the European banking system, French bank stocks offer some of the best value I’ve stumbled on recently.  #-ad_banner-#While BNP Paribas (OTC: BNPZY) has grabbed headlines thanks to a $9.8 billion fine related to doing business with countries blacklisted by U.S. regulators, a cleaner name has showed up on my radar…  Credit Agricole (OTC: CRARY). While it’s true that I wrote an article titled “Why I Will Never Buy Another Bank Stock” a few months ago, the focus was on regional banks — not global giants. There’s a big difference.  With assets of over $2 trillion, Credit Agricole comes in at #9 among the world’s largest banks — but its ADRs (American depositary receipts) have had a rough go of things over the past few years: After falling below $2 in the depths of the Greek-fueled European debt crisis, CRARY has rebounded smartly, more than tripling since mid-2012. But is it still worth buying?  Put simply, the stock has sufficient potential growth combined with an extremely pessimistic value placed on it by a shortsighted market —… Read More

When George Soros is the largest shareholder of any company, investors pay attention. Yet not even Soros is immune to market pullbacks, especially when an entire sector is weak. #-ad_banner-#For Soros, it’s like owning the best house in a depressed market. When the market bounces back, he’ll make the most money. That’s the case with Soros’ investment in ClickSoftware Technologies (Nasdaq: CKSW). At the end of this year’s first quarter, Soros owned nearly 10% of the outstanding shares, his largest stake percentagewise in any software company. ClickSoftware makes computer programs to manage workforces across a wide variety of… Read More

When George Soros is the largest shareholder of any company, investors pay attention. Yet not even Soros is immune to market pullbacks, especially when an entire sector is weak. #-ad_banner-#For Soros, it’s like owning the best house in a depressed market. When the market bounces back, he’ll make the most money. That’s the case with Soros’ investment in ClickSoftware Technologies (Nasdaq: CKSW). At the end of this year’s first quarter, Soros owned nearly 10% of the outstanding shares, his largest stake percentagewise in any software company. ClickSoftware makes computer programs to manage workforces across a wide variety of industries. Part of its weakness has been due to its transition to selling software as a service (SaaS) and offering its services in the cloud for a monthly fee.  ClickSoftware’s business model was previously based solely on selling software with an upfront contract and then installing the software on the client’s computers. In contrast, the risk of the cloud computing model is that clients can cancel their contracts at any time.  The transition to the cloud resulted in ClickSoftware posting a loss last year, its first in more than eight years. Although the company posted a 16% year-over-year increase in… Read More

“Nothing under $5.” #-ad_banner-#That was often the message I was greeted with by mutual hedge fund managers as I sat down to discuss my latest picks with them. As a Wall Street analyst, it was my job to help these managers discover winning ideas. And unfortunately, many of them were restricted from buying any stocks priced below $5. It’s an arbitrary rule established by boards of directors at funds… but one that the rest of us can profit from. That’s because once a stock reaches $5, a lot of these same fund managers start to consider such stocks — and… Read More

“Nothing under $5.” #-ad_banner-#That was often the message I was greeted with by mutual hedge fund managers as I sat down to discuss my latest picks with them. As a Wall Street analyst, it was my job to help these managers discover winning ideas. And unfortunately, many of them were restricted from buying any stocks priced below $5. It’s an arbitrary rule established by boards of directors at funds… but one that the rest of us can profit from. That’s because once a stock reaches $5, a lot of these same fund managers start to consider such stocks — and if they like what they see, they’ll push shares yet higher as they take a stake. Here’s a look at three stocks with each trading under $3 that could reach and surpass that $5 threshold in the year ahead. 1. Ceragon Networks (Nasdaq: CRNT ) Just a few years ago, this provider of high-speed wireless network equipment to emerging-market countries was a popular choice among fund managers. Its sales had surged from $184 million in 2009 to $445 million by 2011. But the past few years have seen a pullback in capital spending by wireless service providers, and… Read More

In addition to a strong fundamental growth story, Monster Beverage (Nasdaq: MNST) has one of the better-looking charts in the consumer goods space. The energy drink company also looks to be a takeover candidate. #-ad_banner-#All of this speaks to a higher stock price in the short to intermediate term. As the energy drink market continues to grow, I can’t help but notice an ever-expanding presence of Monster Energy drinks in grocery and convenience stores. And J.P. Morgan analyst John Faucher recently said the company could be acquired within two to three years. Frankly, it makes sense. Arguably, the barrier to… Read More

In addition to a strong fundamental growth story, Monster Beverage (Nasdaq: MNST) has one of the better-looking charts in the consumer goods space. The energy drink company also looks to be a takeover candidate. #-ad_banner-#All of this speaks to a higher stock price in the short to intermediate term. As the energy drink market continues to grow, I can’t help but notice an ever-expanding presence of Monster Energy drinks in grocery and convenience stores. And J.P. Morgan analyst John Faucher recently said the company could be acquired within two to three years. Frankly, it makes sense. Arguably, the barrier to entry for brewing up a new energy drink is not all that huge. But companies like Coca-Cola (NYSE: KO) and PepsiCo (NYSE: PEP) could surely benefit from acquiring a well-established brand such as Monster, which brings with it access to a new generation of carbonated beverage drinkers. A takeover candidate often makes for an interesting trade, but what really puts the odds in traders’ favor is MNST’s charts. In the multi-year chart, note the ultra-steep slope of the rally in 2011 and the first half of 2012. When a stock’s slope becomes too steep, it often sees a more violent… Read More

One of the toughest parts of investing is knowing when to sell your winners, especially ones that have delivered exceptionally large gains in a relatively short time. The thing about stocks that go up fast is they can go down even faster, quickly wiping out your profits — and then some. #-ad_banner-#This may be exactly where one well-known stock is headed because it, too, has risen fast, about 135% in the past year and a half or so. But that’s not the only reason it could drop. Just because a stock is way up doesn’t necessarily mean it’s… Read More

One of the toughest parts of investing is knowing when to sell your winners, especially ones that have delivered exceptionally large gains in a relatively short time. The thing about stocks that go up fast is they can go down even faster, quickly wiping out your profits — and then some. #-ad_banner-#This may be exactly where one well-known stock is headed because it, too, has risen fast, about 135% in the past year and a half or so. But that’s not the only reason it could drop. Just because a stock is way up doesn’t necessarily mean it’s poised to pull back. No, there are specific reasons to be leery of this firm, a relatively small but popular upscale footwear and accessories maker best known for its Ugg brand of boots, shoes, sneakers and other products. I see the company as something of an upstart because even though it has minuscule sales relative to its biggest competitors, such as Nike (NYSE: NKE) and Adidas (OTC: ADDYY), it clearly has had its share of success in the past. Indeed, Deckers Outdoor Corp. (NYSE: DECK) has more than doubled annual sales to $1.6 billion from $689 million in 2008. During… Read More

Somewhere, comic book creator Chester Gould is smiling. #-ad_banner-#Though he passed away in 1985, he’d be thrilled to know that the smartwatch he created back in the 1940s for his most famous character, Dick Tracy, would finally land on consumers’ wrists in 2014. The first few of these watches have now hit the market and Apple (Nasdaq: AAPL) appears poised to launch its own version in coming months. In fact, smartwatches and larger smartphones (known as phablets) are likely to be the hottest consumer electronics products this coming holiday season. Whether these products deliver major share price gains for Apple… Read More

Somewhere, comic book creator Chester Gould is smiling. #-ad_banner-#Though he passed away in 1985, he’d be thrilled to know that the smartwatch he created back in the 1940s for his most famous character, Dick Tracy, would finally land on consumers’ wrists in 2014. The first few of these watches have now hit the market and Apple (Nasdaq: AAPL) appears poised to launch its own version in coming months. In fact, smartwatches and larger smartphones (known as phablets) are likely to be the hottest consumer electronics products this coming holiday season. Whether these products deliver major share price gains for Apple and its peers remains to be seen. For the most part, analysts are bullish. But in the consumer electronics space, winners can create losers. And few companies have as much to lose from these product categories as Garmin (Nasdaq: GRMN). For years, we’ve been buying stand-alone GPS devices from Garmin and others (which are known in the industry as personal navigation devices or PNDs). Garmin and its peers have managed to forestall any threat from increasingly functional smartphones, largely because such phones had smaller screen sizes. “Garmin has talked periodically over the past two years that its larger screen size… Read More