Even the most dominant companies stumble sometimes, and the highly popular natural and organic foods retailer Whole Foods Market (Nasdaq: WFM) is no exception.  Long the most recognizable name in the health food business, Whole Foods saw its stock plummet nearly 20% on May 6 because it failed to meet analysts’ expectations for the latest quarter. All told, the stock is off about 32% so far this year. This naturally raises the question of whether the pullback presents an uncommon opportunity to invest in a great company while it’s down. I don’t think so. #-ad_banner-#Whole… Read More

Even the most dominant companies stumble sometimes, and the highly popular natural and organic foods retailer Whole Foods Market (Nasdaq: WFM) is no exception.  Long the most recognizable name in the health food business, Whole Foods saw its stock plummet nearly 20% on May 6 because it failed to meet analysts’ expectations for the latest quarter. All told, the stock is off about 32% so far this year. This naturally raises the question of whether the pullback presents an uncommon opportunity to invest in a great company while it’s down. I don’t think so. #-ad_banner-#Whole Foods has been losing ground to the competition for a while, and it’s beginning to affect the company’s performance. In the short term, I suspect its stock may have quite a bit further to fall, and in the long run, I don’t see Whole Foods leading the pack anything like it has in the past. For starters, the company now has two earnings misses in a row. In the most recent quarter, it reported earnings per share (EPS) of $0.38, 7% below the consensus estimate of $0.41. The quarter before that, Whole Foods’ EPS of $0.42 missed the Street’s estimate… Read More

Among the many industries dragged down the weakness of the global economy during the financial crisis and Great Recession, the entire construction sector was pulled down even more than the broader market.  #-ad_banner-#Shares of leading equipment maker Caterpillar (NYSE: CAT) traded as low as $24 in 2009, down 70% from its 2008 high. Deere & Co. (NYSE: DE) tumbled 65% from its high during the financial crisis. In comparison, the S&P 500 Index was down 55% — a whopping figure, but less than these construction names. However, there is stock that is often lumped in with the major construction stocks… Read More

Among the many industries dragged down the weakness of the global economy during the financial crisis and Great Recession, the entire construction sector was pulled down even more than the broader market.  #-ad_banner-#Shares of leading equipment maker Caterpillar (NYSE: CAT) traded as low as $24 in 2009, down 70% from its 2008 high. Deere & Co. (NYSE: DE) tumbled 65% from its high during the financial crisis. In comparison, the S&P 500 Index was down 55% — a whopping figure, but less than these construction names. However, there is stock that is often lumped in with the major construction stocks when it’s actually a retailer. Shares of this company have held up nicely despite the market weakness that crippled the construction sector.  Shares of Tractor Supply Co. (Nasdaq: TSCO) fell 30% from its peak in 2008 — but since then, shares are up nearly tenfold: TSCO data by YCharts One of the nation’s leading retailers of farming and garden-related products, Tractor Supply is easily overlooked, in part, because it caters to only a handful of shoppers, unlike Wal-Mart (NYSE: WMT). However, Tractor Supply is the go-to… Read More

A “follow-up” market crash could be coming. I don’t mean to scare you, but it’s only a matter of time… The past two happened like clockwork — seven years apart. One happened just before 2001, after the dot-com bust. The other came with a vengeance in 2008, right after the housing collapse. It’s getting close to another seven years… so what about this time? Are we headed for a “follow-up” market crash? #-ad_banner-#​The very idea of losing more than half of your invested wealth in a market downturn is daunting. Market analysts claim… Read More

A “follow-up” market crash could be coming. I don’t mean to scare you, but it’s only a matter of time… The past two happened like clockwork — seven years apart. One happened just before 2001, after the dot-com bust. The other came with a vengeance in 2008, right after the housing collapse. It’s getting close to another seven years… so what about this time? Are we headed for a “follow-up” market crash? #-ad_banner-#​The very idea of losing more than half of your invested wealth in a market downturn is daunting. Market analysts claim to know exactly where the market is going, and act like they know exactly when to buy or sell stocks. But how many analysts do you remember saying months before the 2008 financial crisis that the market was going to go down by 57%? Can you name one? And look at mutual fund managers’ records. According to Standard & Poor’s, just 14% of actively managed mutual funds have beaten the market over the past three years. The other 86% of them fail at beating the market, yet we pay them millions in fees every year and trust them to protect… Read More

Just as in the film “Groundhog Day,” my day starts the same way every day.  #-ad_banner-#I pore through dozens of Wall Street reports to stay abreast of the key issues and trends impacting various industries and companies. While boning up on the issues, I also seek out Wall Street’s preferred… Read More

As investors flood out of momentum stocks, they’re looking for safety. There aren’t many safe places to invest. #-ad_banner-#But one place that’s been depressed for a number of years is infrastructure. And this area of the market has a lot of pent-up demand — and a number of growth opportunities. So investors looking to take refuge from the momentum stock sell-off might want to take a look at heavy-equipment makers, which offer some of the best exposure to the rebound in infrastructure spending. Begun as a shipping company more than a century ago, Manitowoc Co. (NYSE: MTW) is… Read More

As investors flood out of momentum stocks, they’re looking for safety. There aren’t many safe places to invest. #-ad_banner-#But one place that’s been depressed for a number of years is infrastructure. And this area of the market has a lot of pent-up demand — and a number of growth opportunities. So investors looking to take refuge from the momentum stock sell-off might want to take a look at heavy-equipment makers, which offer some of the best exposure to the rebound in infrastructure spending. Begun as a shipping company more than a century ago, Manitowoc Co. (NYSE: MTW) is now one of the top crane and food-service equipment manufacturers in the world. The company got out of the shipping business in 2008 and now focuses on cranes and food-service equipment, which account for about 60% and 40% of revenue, respectively. Shares of Manitowoc have recovered from the lows they saw after the real estate bubble burst, but MTW is still 40% off the all-time highs it set in 2007. Similarly, Manitowoc’s crane revenues were close to $1 billion a quarter back in 2008 but tumbled to only $450 million in mid-2010. Crane sales last quarter came in at $466… Read More

Near the end of 2012, investors began to question whether drugstore chain Rite Aid (NYSE: RAD) had much of a future.  #-ad_banner-#Shares traded for just $1 — a price point that often signals possible bankruptcy ahead — as the company’s staggering $6.3 billion debt load looked set to eventually cripple the company. Rite Aid had completed its fiscal year back in February 2012, and in that year, the company had just $128 million in operating income and $529 million in interest expense. Adding insult to injury, Rite Aid was in the midst of a sales… Read More

Near the end of 2012, investors began to question whether drugstore chain Rite Aid (NYSE: RAD) had much of a future.  #-ad_banner-#Shares traded for just $1 — a price point that often signals possible bankruptcy ahead — as the company’s staggering $6.3 billion debt load looked set to eventually cripple the company. Rite Aid had completed its fiscal year back in February 2012, and in that year, the company had just $128 million in operating income and $529 million in interest expense. Adding insult to injury, Rite Aid was in the midst of a sales slump, as revenues fell in three of the four years leading up to fiscal 2013. That’s why even at just $1 a share, this was one of the most heavily shorted stocks on the market. Yet Rite Aid never ended up in bankruptcy. Management pulled out every stop to ensure that operating profits would rise to the level of interest expense — and then surpass it… which is the only way a debt-laden business can survive over the long term. Rite Aid Takes Control Of Its Debt Rising cash flow enabled Rite Aid… Read More

Luxury electric vehicle maker Tesla Motors (Nasdaq: TSLA) failed to wow investors when it reported first-quarter results last week. A sell-off followed that took the stock down to a technically critical level. #-ad_banner-#Purely looking at the numbers, Tesla did well: Earnings per share (EPS) of $0.12 beat analyst expectations of $0.10. Tesla delivered 6,457 cars during the quarter, slightly beating its guidance of 6,400, and it produced a record 7,535 vehicles. The company stuck with its previous full-year guidance for around 35,000 vehicle deliveries. In February, TSLA rallied on the back of news that the company is planning to build… Read More

Luxury electric vehicle maker Tesla Motors (Nasdaq: TSLA) failed to wow investors when it reported first-quarter results last week. A sell-off followed that took the stock down to a technically critical level. #-ad_banner-#Purely looking at the numbers, Tesla did well: Earnings per share (EPS) of $0.12 beat analyst expectations of $0.10. Tesla delivered 6,457 cars during the quarter, slightly beating its guidance of 6,400, and it produced a record 7,535 vehicles. The company stuck with its previous full-year guidance for around 35,000 vehicle deliveries. In February, TSLA rallied on the back of news that the company is planning to build a so-called Gigafactory to achieve economies of scale in battery production. According to the company, The Gigafactory “is designed to reduce cell costs much faster than the status quo and, by 2020, produce more lithium-ion batteries annually than were produced worldwide in 2013.” TSLA fully retraced this rally in ensuing weeks, but many analysts seemed focused on the Gigafactory’s progress during last week’s conference call. CEO Elon Musk said that plans for the factory are on track and that the company will break ground on the first two projects in June. Musk also said that Panasonic, a well-known battery supplier,… Read More

Earlier this month, over 35,000 people flocked to the “Woodstock for Capitalists” just for a chance to sit in on a six-hour Q&A with the world’s greatest investor — Warren Buffett. To give you an idea of what kind of spectacle this is, just look at sales for Berkshire-owned Nebraska Furniture Mart located in Omaha where the Berkshire Hathaway shareholder meeting takes place every year. In the week surrounding the prestigious shareholder meeting, Nebraska Furniture Mart did over $40 million in sales… which is typically what they do in one month. #-ad_banner-#The shareholder meeting is one of the greatest financial-education… Read More

Earlier this month, over 35,000 people flocked to the “Woodstock for Capitalists” just for a chance to sit in on a six-hour Q&A with the world’s greatest investor — Warren Buffett. To give you an idea of what kind of spectacle this is, just look at sales for Berkshire-owned Nebraska Furniture Mart located in Omaha where the Berkshire Hathaway shareholder meeting takes place every year. In the week surrounding the prestigious shareholder meeting, Nebraska Furniture Mart did over $40 million in sales… which is typically what they do in one month. #-ad_banner-#The shareholder meeting is one of the greatest financial-education experiences in the world. Attendees get peppered with useful financial information about not only Berkshire, but investing and the economy as a whole. Here are a few great tips that he shared at his recent shareholder meeting. Using Insurance “Float” For Success “Our investment in the insurance companies reflects a first major step in our efforts to achieve a more diversified base of earning power.” — 1967 Annual Report Insurance is Berkshire’s core operation and the engine that has consistently propelled their expansion since 1967. Its first insurance endeavor began with the purchase of National Indemnity for $8.6 million… Read More

One thing that I have grown to appreciate about investing is that it is a pursuit that you get better at over time.    #-ad_banner-#This is a game in which experience counts. And there is no experience that provides a better source of investment lessons than the mistakes you’ve made yourself. Mistakes aren’t always those of commission (although I’ve made plenty of those). There are also errors of omission, as in things that you didn’t do but should have. For example, in 2004, when Google (Nasdaq: GOOG) had its IPO, a friend of mine pounded the table and told me… Read More

One thing that I have grown to appreciate about investing is that it is a pursuit that you get better at over time.    #-ad_banner-#This is a game in which experience counts. And there is no experience that provides a better source of investment lessons than the mistakes you’ve made yourself. Mistakes aren’t always those of commission (although I’ve made plenty of those). There are also errors of omission, as in things that you didn’t do but should have. For example, in 2004, when Google (Nasdaq: GOOG) had its IPO, a friend of mine pounded the table and told me that I “had to own” the company. I thought he was crazy because to me Google looked very expensive on both a price-to-earnings (P/E) and price-to-cash flow basis. I was wrong. While Google did look expensive relative to other companies, it was not even close to being expensive relative to its future earning power. What I didn’t appreciate was that Google had a tremendous moat around its business and massive growth in front of it. Google’s share price went from $50 in 2004 to well over $500 today. The lesson I learned is that it is worth paying up (within… Read More

When it comes to investing, I’m a huge fan of “boring.” That is, I appreciate companies with crucial but more obscure products that are so much a part of our daily lives that most people wouldn’t even think of them as investments. Take Packaging Corp. of America (NYSE: PKG), which makes about the most boring things you could ever think of — cardboard boxes and other types of packaging. Yet as I pointed out when I profiled the company in April, its stock has triple-digit upside during the next five years. #-ad_banner-#So does another “boring” stock I’d like… Read More

When it comes to investing, I’m a huge fan of “boring.” That is, I appreciate companies with crucial but more obscure products that are so much a part of our daily lives that most people wouldn’t even think of them as investments. Take Packaging Corp. of America (NYSE: PKG), which makes about the most boring things you could ever think of — cardboard boxes and other types of packaging. Yet as I pointed out when I profiled the company in April, its stock has triple-digit upside during the next five years. #-ad_banner-#So does another “boring” stock I’d like to tell you about. I’ll leave it up to you to decide if the underlying company’s main products, high-efficiency residential and commercial water heaters, are as boring as cardboard. But I think it’s safe to say they don’t spark the imagination the way 3-D printing, wearable computers, mobile banking, e-cigarettes and other emerging products do. Still, the investment potential of this firm, A.O. Smith Corp. (NYSE: AOS), is very exciting. Its stock has generated some outstanding returns already, rising nearly 350% during the past five years. And I think the price could easily double again in the next five years. Read More