Once you get a certain impression about a stock, it can be tough to change your mind. #-ad_banner-#For instance, when I think of the three stocks I’m going to talk about today, my mind goes back to the times over the past couple of years when all three looked like they were on the verge of collapse.  Yet today those stocks have shown tremendous gains over the past year, and bullish sentiment is on the rise. But before you invest in these comeback kids, beware…  These stocks may set you up for a tumble down the road —… Read More

Once you get a certain impression about a stock, it can be tough to change your mind. #-ad_banner-#For instance, when I think of the three stocks I’m going to talk about today, my mind goes back to the times over the past couple of years when all three looked like they were on the verge of collapse.  Yet today those stocks have shown tremendous gains over the past year, and bullish sentiment is on the rise. But before you invest in these comeback kids, beware…  These stocks may set you up for a tumble down the road — particularly if you buy into recent high prices.  After all, revenue growth is still the name of the game, and these companies are all struggling to find it for the long haul. Let’s take a closer look. Pitney Bowes (NYSE: PBI ) It’s hard to believe, but Pitney Bowes is up over 80% in the past year. That’s hard to believe because just over a year ago, the company reported a jaw-dropping year-over-year drop in earnings of 58% — fallout from a steep multi-year sales decline — and cut its dividend in half.  ​… Read More

As an active investor, I am always looking for profitable ways to screen, study and implement new trades. Over time, I’ve built a toolbox of high-probability scenarios that I revisit from time to time, hoping to uncover a stock or idea that checks each box on my list. #-ad_banner-#When looking to take long positions in stocks, one of the key measures I look at revolves around something known as short interest. It’s a fairly basic metric that relates how many shares investors currently hold short positions in a stock. In general, the higher the short interest, the greater the negative… Read More

As an active investor, I am always looking for profitable ways to screen, study and implement new trades. Over time, I’ve built a toolbox of high-probability scenarios that I revisit from time to time, hoping to uncover a stock or idea that checks each box on my list. #-ad_banner-#When looking to take long positions in stocks, one of the key measures I look at revolves around something known as short interest. It’s a fairly basic metric that relates how many shares investors currently hold short positions in a stock. In general, the higher the short interest, the greater the negative outlook on the stock — but a high short interest doesn’t necessarily mean the stock is trading low. Similarly, a related metric, known as days to cover, divides the short interest by a stock’s average daily trading volume. If Stock ABC has 10 million shares short and trades an average of 2 million shares a day, it would take five days to cover that short interest. Why is this important when buying stocks? One potential result from high short interest is something called a short squeeze, which occurs when a stock runs up and forces those short shares to be… Read More

Being a contrarian investor is not easy. You will be investing on the opposite side of the majority of investors. Many people will say you’re wrong.  #-ad_banner-#However, some of the market’s greatest investors are contrarians. These include the likes of Jim Rogers, George Soros and Howard Marks, who all believe in going against the grain when it comes to investing.  So how do you find stocks that the broader market hates?  The easiest way is to look at which stocks have a high short interest. Investors might be short for any number of reasons, but if the… Read More

Being a contrarian investor is not easy. You will be investing on the opposite side of the majority of investors. Many people will say you’re wrong.  #-ad_banner-#However, some of the market’s greatest investors are contrarians. These include the likes of Jim Rogers, George Soros and Howard Marks, who all believe in going against the grain when it comes to investing.  So how do you find stocks that the broader market hates?  The easiest way is to look at which stocks have a high short interest. Investors might be short for any number of reasons, but if the company starts showing signs of strength, shorts will begin abandoning their positions.  That is because the potential loss for short sellers is unlimited — there’s no telling how high a stock can go. Once a stock starts ticking higher, a short squeeze can ensue when short sellers start covering their positions, which can in turn drive the stock even higher.  I’ve identified five stocks that have a relatively high short interest, but they also appear to be trading at valuations that might be attractive for deep value investors. 1. Conn’s (Nasdaq: CONN ) Short interest: 32%​ Shares of… Read More

I have three chart services at my fingertips — but for me, reviewing charts is a visual thing. After 26 years of deciphering stock charts, recognizing the patterns has become second nature. #-ad_banner-#Every weekend, I screen all the growth stocks that I follow to see which charts are on the verge of breaking out. I then take the stocks with good-looking charts and review their fundamentals. I’m looking for stocks with projected earnings growth (plus dividends) of 15% or more for each of the next three years. My goal is to identify the stocks that have the best chance of… Read More

I have three chart services at my fingertips — but for me, reviewing charts is a visual thing. After 26 years of deciphering stock charts, recognizing the patterns has become second nature. #-ad_banner-#Every weekend, I screen all the growth stocks that I follow to see which charts are on the verge of breaking out. I then take the stocks with good-looking charts and review their fundamentals. I’m looking for stocks with projected earnings growth (plus dividends) of 15% or more for each of the next three years. My goal is to identify the stocks that have the best chance of going up immediately. The charts tell me which stocks are going up, and the earnings growth verifies that the stocks have a good reason to go up. Now I’ve got my buy list for the week. I then review the larger list of stocks that made the first cut-off — the ones with the bullish charts — and group them into industries to see which trends materialize. Whichever industry is leading, I do more research among the major stocks in that industry to find a few more good investment ideas. Earlier this year, oilfield services companies — Baker Hughes (NYSE:… Read More

Technology industry analysts sense a groundswell coming. #-ad_banner-#A series of factors have set the stage for a potentially very busy summer of deal-making. And with some creative thinking, you can get a sense of which smaller companies might soon become buyout fodder. You know that it’s a strange time in the tech sector when Apple (Nasdaq: AAPL), which almost always focuses on tiny tuck-in acquisitions, shells out $3 billion for Beats Audio. Around the same time that deal was being drawn up by lawyers and bankers, the rumor mill buzzed with… Read More

Technology industry analysts sense a groundswell coming. #-ad_banner-#A series of factors have set the stage for a potentially very busy summer of deal-making. And with some creative thinking, you can get a sense of which smaller companies might soon become buyout fodder. You know that it’s a strange time in the tech sector when Apple (Nasdaq: AAPL), which almost always focuses on tiny tuck-in acquisitions, shells out $3 billion for Beats Audio. Around the same time that deal was being drawn up by lawyers and bankers, the rumor mill buzzed with a possible Google (Nasdaq: GOOG) purchase of Yelp (NYSE: YELP). Shares of Yelp zoomed just more than 30% to $68 in the last three weeks of May, but if no such deal is announced soon, shares may drift lower. Still, a Google/Yelp linkup makes ample sense.  Google loves to generate product and service reviews, which lead to great ad sales. Google did acquire restaurant ratings firm Zagat in 2011, though that deal hasn’t been able to derail Yelp’s torrid growth and segment leadership. Google allegedly tried to acquire Yelp for $500 million back in 2010 before it went public, though… Read More

After a century of paying bills through the mail, an increasing number of Americans have made the switch to online bill payment systems. Banks love the system because it reduces their transaction costs, but they now have a new competitor: Bitcoin. #-ad_banner-#Satellite TV provider Dish Networks (Nasdaq: DISH) has just announced plans to start accepting bitcoin. Overstock.com (Nasdaq: OSTK) and Virgin America also initiated a bitcoin payment option in the past year, and other major corporations may soon follow. That means you’re likely to start hearing a lot more about this virtual currency. For non-techies like me, two quick questions… Read More

After a century of paying bills through the mail, an increasing number of Americans have made the switch to online bill payment systems. Banks love the system because it reduces their transaction costs, but they now have a new competitor: Bitcoin. #-ad_banner-#Satellite TV provider Dish Networks (Nasdaq: DISH) has just announced plans to start accepting bitcoin. Overstock.com (Nasdaq: OSTK) and Virgin America also initiated a bitcoin payment option in the past year, and other major corporations may soon follow. That means you’re likely to start hearing a lot more about this virtual currency. For non-techies like me, two quick questions arose: How does bitcoin actually work? And is it a good idea, or just a flavor of the month? To find out, I did a little digging. Controversial, But Gaining Acceptance Bitcoin was launched in 2009 as an alternative to traditional payment systems. While digital payment systems such as PayPal conduct transactions in hard currencies (such as the dollar), bitcoin is an entirely new form of currency. The methodology underpinning bitcoin is both brilliant and absurdly complex. Here’s a quick primer: Bitcoins are created as rewards for its use as a payment,… Read More

When considering whether to buy or sell a stock, many investors base their decision heavily on the actions of key insiders such as the CEO, the chairman of the board, and others. After all, who should know more about a firm’s investment merits than those running the company? #-ad_banner-#Blindly following insiders into and out of a stock can be dangerous, though. Like the rest of us, insiders are human. So who’s to say they’ll never make mistakes such as selling in a panic during bad markets or buying on the assumption their company’s stock will simply keep going up? But… Read More

When considering whether to buy or sell a stock, many investors base their decision heavily on the actions of key insiders such as the CEO, the chairman of the board, and others. After all, who should know more about a firm’s investment merits than those running the company? #-ad_banner-#Blindly following insiders into and out of a stock can be dangerous, though. Like the rest of us, insiders are human. So who’s to say they’ll never make mistakes such as selling in a panic during bad markets or buying on the assumption their company’s stock will simply keep going up? But when it comes right down to it, we don’t really know why insiders buy or sell. They don’t have to tell us, only report when they did and how many shares were transacted. So even though it can be informative to know what insiders are doing, they can easily be dead wrong. And they certainly are about one well-known stock, in my opinion. As a group, this company’s key insiders have reduced their ownership of the stock by more than 14% during the past 12 months, according to Morningstar. They now hold a total of about 225,000 shares worth roughly… Read More

Finding investment ideas is never an easy task. Hedge funds, with their manpower and access to research, outgun individual investors. Some of the greatest minds in the market also run many of these hedge funds.  #-ad_banner-#These include the likes of billionaire gurus Warren Buffett, Carl Icahn and Dan Loeb. Each quarter we get a glimpse into what the greats are buying. Funds managing over $100 million must file a Form 13F with the SEC. These filings come up to 45 days after the end of the quarter, but investors can still use them to find new ideas for… Read More

Finding investment ideas is never an easy task. Hedge funds, with their manpower and access to research, outgun individual investors. Some of the greatest minds in the market also run many of these hedge funds.  #-ad_banner-#These include the likes of billionaire gurus Warren Buffett, Carl Icahn and Dan Loeb. Each quarter we get a glimpse into what the greats are buying. Funds managing over $100 million must file a Form 13F with the SEC. These filings come up to 45 days after the end of the quarter, but investors can still use them to find new ideas for their own portfolios.  As far as stocks that the billionaires are buying, it is always a positive sign if more than one major hedge fund is buying the stock. Below are three stocks that saw some of the greatest interest among top hedge funds. First up is emerging e-commerce giant eBay (Nasdaq: EBAY), which had seven hedge funds added to their portfolios. The most notable buyers included Icahn, activist fund Jana Partners and Tiger Consumer Management.  Icahn tried to convince eBay to spin off PayPal. (My colleague Tim Begany took at look at this story last month.) After a bit… Read More

Time Magazine called him the “most fabulous living U.S. stock trader.” He was also known as the “Boy Plunger” and the “Great Bear of Wall Street.” Unfairly blamed and vilified for causing the both the 1907 and 1929 stock market crashes, Jesse Livermore also was (and continues to be) held in high esteem by countless investors. #-ad_banner-#He owned incredible mansions and all the trappings of vast wealth of the early 20th century. Far from being a loner or hermit, he married several beautiful, socially connected women and traveled in the same circles as the rich and… Read More

Time Magazine called him the “most fabulous living U.S. stock trader.” He was also known as the “Boy Plunger” and the “Great Bear of Wall Street.” Unfairly blamed and vilified for causing the both the 1907 and 1929 stock market crashes, Jesse Livermore also was (and continues to be) held in high esteem by countless investors. #-ad_banner-#He owned incredible mansions and all the trappings of vast wealth of the early 20th century. Far from being a loner or hermit, he married several beautiful, socially connected women and traveled in the same circles as the rich and famous of his era. However, his life was far from being all wine and roses. This master investor swung between great personal highs and soul-crushing lows. Despite making and losing several multi-million-dollar fortunes over his lifetime (including earning a reported $100 million by shorting the market meltdown of 1929), his lifelong battle with depression ended in 1940 with his suicide at a New York hotel. Fortunately, he left behind many investing rules and stock-picking techniques that still make perfect sense despite the radical market changes that have occurred since he plied his trade. Furthermore, during his life, Livermore emphasized that… Read More

Officers and directors of the nation’s smallest and youngest biotech companies can look up their stock quotes once again. Stocks in the sector were in such rapid freefall a few months ago that a glance at the stock price chart became too painful to bear. How painful was the sell-off?  I counted 30 biotech stocks that shed at least 40% of their value in the past three months, with half of them plunging by more than 50%. #-ad_banner-#​Yet it appears as if the worst of the storm has passed. Dicerna Pharmaceuticals (Nasdaq: DRNA), for… Read More

Officers and directors of the nation’s smallest and youngest biotech companies can look up their stock quotes once again. Stocks in the sector were in such rapid freefall a few months ago that a glance at the stock price chart became too painful to bear. How painful was the sell-off?  I counted 30 biotech stocks that shed at least 40% of their value in the past three months, with half of them plunging by more than 50%. #-ad_banner-#​Yet it appears as if the worst of the storm has passed. Dicerna Pharmaceuticals (Nasdaq: DRNA), for example, which has lost two-thirds of its value this year, is up roughly 5% since April 20. Most other stumbling biotechs have also stabilized in the past month or so. Of course, such sell-offs don’t necessarily invite buying opportunities. Instead, it is wiser to focus on the soundest business models, even if they are only off 25% or 35% in this recent pullback. I’ve been spending time the past few days with the most promising biotechs. I favor those with good science, strong testing data, potentially large market opportunities and healthy cash balances. Here’s a short list… Read More