For those that don’t know, in addition to being the Chief Strategist behind StreetAuthority’s Stock of the Month newsletter, I’m also an avid poker player. I first picked up poker more than a decade ago, well before it was all over television. But I wasn’t after the big jackpot like most of the people who’ve taken up the game. I simply thought poker could make me a better investor. Poker has a lot in common with investing — and no, I’m not talking about luck. In poker, you don’t get the luxury of making your moves in a vacuum or… Read More

For those that don’t know, in addition to being the Chief Strategist behind StreetAuthority’s Stock of the Month newsletter, I’m also an avid poker player. I first picked up poker more than a decade ago, well before it was all over television. But I wasn’t after the big jackpot like most of the people who’ve taken up the game. I simply thought poker could make me a better investor. Poker has a lot in common with investing — and no, I’m not talking about luck. In poker, you don’t get the luxury of making your moves in a vacuum or without consideration for the dynamics other players bring to the game. It also takes patience and foresight to win consistently. And sometimes, it’s not about winning, but simply knowing when to cut your losses. #-ad_banner-#When put in those terms, it’s easy to see how playing poker can make you a better investor. It’s easy to spot an inexperienced player at a poker table. He’ll be the guy who plays nearly every hand. He’s probably grown up watching televised poker, where folded hands are edited out to highlight the relatively few contested hands. In his limited view, he believes by playing… Read More

From a financial perspective, 2013 was a banner year for many investors. #-ad_banner-#Increased economic confidence, recovering housing markets and super-sized returns from the major indices made the recession of 2008 all but a distant memory. The S&P 500 delivered a gain of nearly 30%, propping up retirement accounts and prompting even greater inflows into funds of all kinds: index, mutual and hedge. As is typical after the end of each year, we’re inundated with rankings and commentary to see just how these asset managers actually performed — a tough comparison when passive investments gave such outsized returns with little to… Read More

From a financial perspective, 2013 was a banner year for many investors. #-ad_banner-#Increased economic confidence, recovering housing markets and super-sized returns from the major indices made the recession of 2008 all but a distant memory. The S&P 500 delivered a gain of nearly 30%, propping up retirement accounts and prompting even greater inflows into funds of all kinds: index, mutual and hedge. As is typical after the end of each year, we’re inundated with rankings and commentary to see just how these asset managers actually performed — a tough comparison when passive investments gave such outsized returns with little to no fees. Exceptional stock-picking, properly managed risk, and a long-only bias separated the gurus from the rest of the pack — and one manager stood out handily from his peers, grabbing the top spot as the best-performing large hedge fund, according to Bloomberg. Larry Robbins of Glenview Capital Management delivered an astounding 84% return with his Capital Opportunity Fund. How’d he do it? By going long the health care industry, betting it would get a boost from the passing of the Affordable Care Act. Fortunately for Robbins and his investors, it did just that. His latest Form 13F shows that… Read More

Whenever there is a bidding war on Wall Street, one company emerges as the victor, with the loser forced to regroup. Typically, the loser will then look for a consolation prize: another company in the same industry. #-ad_banner-#This could be what happens next as Pilgrim’s Pride (Nasdaq: PPC) and Tyson Foods (NYSE: TSN) battle over Hillshire Brands (NYSE: HSH).  Only one company can win the bidding war for Hillshire Brands. Whichever company loses will likely then go looking for its next acquisition target — but there are very few publicly traded meat producers. I expect the next target for Pilgrim’s… Read More

Whenever there is a bidding war on Wall Street, one company emerges as the victor, with the loser forced to regroup. Typically, the loser will then look for a consolation prize: another company in the same industry. #-ad_banner-#This could be what happens next as Pilgrim’s Pride (Nasdaq: PPC) and Tyson Foods (NYSE: TSN) battle over Hillshire Brands (NYSE: HSH).  Only one company can win the bidding war for Hillshire Brands. Whichever company loses will likely then go looking for its next acquisition target — but there are very few publicly traded meat producers. I expect the next target for Pilgrim’s Pride or Tyson (one of my favorite stocks) could well be Sanderson Farms (Nasdaq: SAFM), a $2.2 billion company that makes and sells chicken products in the U.S. What makes Sanderson Farms an attractive target is that in the wake of rapid consolidation in the meat producer industry, there aren’t many companies left to buy. For instance, pork producer Smithfield Farms was acquired last year by a Chinese firm for $7.1 billion to feed the growing demand for pork in China, the world’s largest consumer of pork.  One of Sanderson’s main competitors is Perdue Farms. Perdue is privately held, and… Read More

I love a good underdog stock. When the crowd thinks a company’s fortunes are in decline, I like to take a closer look to see if there’s solid evidence to support their point of view. Often there’s not. #-ad_banner-#As a contrarian, I’ve repeatedly made outsized profits trading what others shy away from. But rather than the “Dogs of the Dow,” I prefer the underdogs of the S&P 500. (My colleague Christian Hudspeth laid out a similar strategy last month.) In particular, I’m excited about the prospects for the world’s largest multinational consumer electronics retailer, Best Buy (NYSE: BBY). The bears… Read More

I love a good underdog stock. When the crowd thinks a company’s fortunes are in decline, I like to take a closer look to see if there’s solid evidence to support their point of view. Often there’s not. #-ad_banner-#As a contrarian, I’ve repeatedly made outsized profits trading what others shy away from. But rather than the “Dogs of the Dow,” I prefer the underdogs of the S&P 500. (My colleague Christian Hudspeth laid out a similar strategy last month.) In particular, I’m excited about the prospects for the world’s largest multinational consumer electronics retailer, Best Buy (NYSE: BBY). The bears will argue the company’s glory days are over. (In fact, my colleague Marc Bastow recently argued just that.) Consumer electronic sales are slumping, with researcher NPD projecting they will drop 2.6% in the second quarter. More important, the bears will tell you, consumers are more apt to purchase their electronics online than in brick-and-mortar stores. With e-retailers like Amazon.com (Nasdaq: AMZN) operating on thinner margins, they can offer lower prices. BBY has seen the trend toward online buying and is fighting back. Online revenue is growing quickly, jumping 29% year over year in the first quarter. The company recently improved… Read More

I’ve been in this racket for nearly two decades. And I have to say, I’ve heard lots of creative excuses from companies for missing earnings estimates, all of which seem to be about as effective as “the dog ate my homework.” #-ad_banner-#The weather has always been my favorite excuse especially with retail and homebuilding and related supply stocks. “It was too hot, so people didn’t buy.” Or “It was too cold, so people didn’t come out.” Granted, here in the U.S., we did have an extremely cold and extended winter. So, when first-quarter earnings rolled out this year, the weather… Read More

I’ve been in this racket for nearly two decades. And I have to say, I’ve heard lots of creative excuses from companies for missing earnings estimates, all of which seem to be about as effective as “the dog ate my homework.” #-ad_banner-#The weather has always been my favorite excuse especially with retail and homebuilding and related supply stocks. “It was too hot, so people didn’t buy.” Or “It was too cold, so people didn’t come out.” Granted, here in the U.S., we did have an extremely cold and extended winter. So, when first-quarter earnings rolled out this year, the weather was blamed by more businesses than usual. But one building products company caught my attention by delivering stellar earnings without a mention of the snow or ice — and its back story is even more intriguing than its growth rate. Based in Israel, Caesarstone Sdot-Yam (Nasdaq: CSTE) is a leading manufacturer of engineered quartz surfaces used mainly in countertops for the residential and commercial markets. The company sells in 42 countries through both direct and independent distribution. Since its 2012 IPO, the stock has been on a tear. But as interesting as CSTE’s merits might be, the story… Read More

The identity of the sector in the S&P 500 with the fastest dividend growth may come as a surprise to a lot of investors…  #-ad_banner-#Information systems.  Dividends were once anathema to the tech industry, as the standard was to plow back profits and cash flow back into R&D. Credit Intel (Nasdaq: INTC) and Microsoft (Nasdaq: MSFT), two of the biggest tech names of the time, for turning the tide on dividend payments. Intel was actually well ahead of the game, starting up its dividend payout in 1993, while “Mr. Softy” initiated its dividend in 2003.  Where are we… Read More

The identity of the sector in the S&P 500 with the fastest dividend growth may come as a surprise to a lot of investors…  #-ad_banner-#Information systems.  Dividends were once anathema to the tech industry, as the standard was to plow back profits and cash flow back into R&D. Credit Intel (Nasdaq: INTC) and Microsoft (Nasdaq: MSFT), two of the biggest tech names of the time, for turning the tide on dividend payments. Intel was actually well ahead of the game, starting up its dividend payout in 1993, while “Mr. Softy” initiated its dividend in 2003.  Where are we today? The 32 dividend-paying IT stocks in the S&P 500 in 2010 yielded 0.94%. That figure grew to 1.13% among the index’s 44 dividend payers at the end of 2013. Of course, Apple (Nasdaq: AAPL), the second-biggest payer in terms of dollars (after Exxon Mobil (NYSE: XOM)), helped boost the number, but others like Cisco (Nasdaq: CSCO) are helping to move the needle, too.  Microsoft and Intel may be the current rock stars for long-term tech dividend investors, but what about the rising stars of the industry? I’m looking for investments you can buy and hold… Read More

Few U.S. investors have heard of Switzerland’s Holcim (OTC: HCMLY) and France’s Lafarge (OTC: LFRGY), which trade on the pink sheets. But they are well known in Europe, with $40 billion in combined sales in 2013. Back in April, these two cement producers announced plans to merge, creating an entity that will be more than twice as large as its next closest competitor, Mexico’s Cemex (NYSE: CX).  #-ad_banner-#Why should you care about this European merger? Because Cemex may soon experience a pitched battle for market… Read More

Few U.S. investors have heard of Switzerland’s Holcim (OTC: HCMLY) and France’s Lafarge (OTC: LFRGY), which trade on the pink sheets. But they are well known in Europe, with $40 billion in combined sales in 2013. Back in April, these two cement producers announced plans to merge, creating an entity that will be more than twice as large as its next closest competitor, Mexico’s Cemex (NYSE: CX).  #-ad_banner-#Why should you care about this European merger? Because Cemex may soon experience a pitched battle for market share. Despite its south-of-the-border heritage, Cemex has a substantial presence here in the U.S. With 21% market share, it is the leading cement supplier in the U.S. This merger, if approved, would push Cemex to #2. More importantly, market share battles often lead to price wars, and Cemex simply can’t afford one. Holcim and Lafarge know that Cemex is in a weakened state and will likely look to press their beleaguered rival in hopes of creating financial distress.  A decade ago, the global economy was quite healthy, and construction cranes were popping up in almost every major city. Cemex’s executives… Read More

A surging stock price suggests a healthy company, and a flagging price portends even worse days ahead. Or so you’d think. In fact, the converse may be true. Out-of-favor stocks often represent the best upside simply because they have few fans, many of which may eventually become converts. That as surely the case a year ago, when Facebook (Nasdaq: FB) was becoming one of the most hated stocks on Wall Street. Fund managers that bought into this once-hot IPO began heading for the exits. #-ad_banner-#​Yet as I noted at the time, soon-to-be-released quarterly results should lead “many investors to… Read More

A surging stock price suggests a healthy company, and a flagging price portends even worse days ahead. Or so you’d think. In fact, the converse may be true. Out-of-favor stocks often represent the best upside simply because they have few fans, many of which may eventually become converts. That as surely the case a year ago, when Facebook (Nasdaq: FB) was becoming one of the most hated stocks on Wall Street. Fund managers that bought into this once-hot IPO began heading for the exits. #-ad_banner-#​Yet as I noted at the time, soon-to-be-released quarterly results should lead “many investors to give this moribund stock a fresh look.” Like clockwork, Facebook delivered solid quarterly results in July, and the once-hated stock has never looked back, climbing 160% since then. Why was upside for Facebook, in hindsight, so obvious? Because it was very easy to find fault with the company’s recent financial performance, and even easier to overlook the positive attributes that were beginning to bubble up. A year later, a very similar setup is in place for a once-hot social media IPO. Since Dec. 26, shares of Twitter (NYSE: TWTR) have fallen 56% while the Nasdaq has been roughly flat. And the… Read More

Quick, what’s in your wallet right now? My guess is you have some family pictures, a few credit cards and maybe some old business receipts. If you’re more old fashioned like I am, you might hold a few greenbacks in there as well… just in case. Why am I asking? Because I predict that within the next five to ten years you won’t need a wallet. #-ad_banner-#Simply put, I predict a small technology company is going to make all material forms of currency obsolete. And it’s going to do so with the help from technology juggernauts like Apple (Nasdaq: AAPL)… Read More

Quick, what’s in your wallet right now? My guess is you have some family pictures, a few credit cards and maybe some old business receipts. If you’re more old fashioned like I am, you might hold a few greenbacks in there as well… just in case. Why am I asking? Because I predict that within the next five to ten years you won’t need a wallet. #-ad_banner-#Simply put, I predict a small technology company is going to make all material forms of currency obsolete. And it’s going to do so with the help from technology juggernauts like Apple (Nasdaq: AAPL) and Google (Nasdaq: GOOGL). If that sounds crazy, consider this. It took a few thousand years to go from coins to paper money and then onto charge cards. It took 18 years for debit cards to surpass checks. Four years after that, more than 50% of all transactions were electronic. This year, nearly two out of every three money transactions (64%) will be made electronically. While many of those transactions will be online, a large portion will come from something called “near field communication” (NFC) — a new technology that’s getting widespread attention across the globe. Near field communication is… Read More

The semiconductor industry is notorious for repeated boom and bust cycles. #-ad_banner-#Supply and demand for chips can have a rapid impact on industry profits. For example, when too many chips hit the market, a rapid price plunge can ensue that wipes all profits for that cycle. It’s no wonder such stocks deserve low price-to-earnings (P/E) ratios. Memory chip maker Micron Technology (NYSE: MU) is the poster child for such peaks and valleys: Micron has lost money in four of the past seven fiscal years, racking up a cumulative $1 billion in operating losses in that time. Still, Micron’s aggressive shift… Read More

The semiconductor industry is notorious for repeated boom and bust cycles. #-ad_banner-#Supply and demand for chips can have a rapid impact on industry profits. For example, when too many chips hit the market, a rapid price plunge can ensue that wipes all profits for that cycle. It’s no wonder such stocks deserve low price-to-earnings (P/E) ratios. Memory chip maker Micron Technology (NYSE: MU) is the poster child for such peaks and valleys: Micron has lost money in four of the past seven fiscal years, racking up a cumulative $1 billion in operating losses in that time. Still, Micron’s aggressive shift in 2011 away from deeply cyclical DRAM (dynamic random-access memory) chips and toward increasingly popular flash memory appeared poised to give a sharp boost to sales and boost to profits, and a path to consistent profitability. Roughly three years ago, I wrote that the advent of tablet computers, with their need for ample flash memory, would help finally push this stock out of doldrums. Fast forward to 2014, and Micron is now earning a record $3 a share annually, and shares are up 370% since I profiled them back in 2011. Micron also got a sharp boost by acquiring an Asia-based… Read More