When shares of Big Data firm Splunk (Nasdaq: SPLK) crossed the $100 mark at the end of February, the company had just delivered its first $100 million quarter. That was more than 50% higher than a year earlier, helping to seemingly justify the company’s market value, which had just exceeded $10 billion.  #-ad_banner-#Analysts at FBN Securities noted that such a lofty valuation “shows that the stock is not for the faint of heart,” but they saw another 15% upside to their $115 price target. As it turns out, most have investors have lost heart. This stock has plunged 40% to… Read More

When shares of Big Data firm Splunk (Nasdaq: SPLK) crossed the $100 mark at the end of February, the company had just delivered its first $100 million quarter. That was more than 50% higher than a year earlier, helping to seemingly justify the company’s market value, which had just exceeded $10 billion.  #-ad_banner-#Analysts at FBN Securities noted that such a lofty valuation “shows that the stock is not for the faint of heart,” but they saw another 15% upside to their $115 price target. As it turns out, most have investors have lost heart. This stock has plunged 40% to around $60 over the past five weeks. What was once seen as an “own at any price” stock has quite suddenly become a “too hot to touch” stock.  And Splunk has esteemed company: Many richly valued tech stocks have been falling at a rapid pace in recent weeks, even though forward sales and profit estimates have remained largely intact. Make no mistake: If the market heads lower from here, these very same tech stocks have a lot more downside ahead. How do we know that? Many of them remain richly valued.  Splunk, despite its sharp, plunge, is one… Read More

When shopping for jewelry, many shoppers might not be able to afford the little blue box that comes from Tiffany & Co. (NYSE: TIF). However, they might be familiar with the phrases “He Went to Jared” and “Every Kiss Begins With Kay.” #-ad_banner-#Jared and Kay Jewelers offer shoppers the opportunity to buy fine jewelry at a more affordable price than what you’ll find at Tiffany. And the company that owns the Jared and Kay Jewelers brands might not just be a better place to shop, but also a better investment than Tiffany. Signet Jewelers (NYSE:… Read More

When shopping for jewelry, many shoppers might not be able to afford the little blue box that comes from Tiffany & Co. (NYSE: TIF). However, they might be familiar with the phrases “He Went to Jared” and “Every Kiss Begins With Kay.” #-ad_banner-#Jared and Kay Jewelers offer shoppers the opportunity to buy fine jewelry at a more affordable price than what you’ll find at Tiffany. And the company that owns the Jared and Kay Jewelers brands might not just be a better place to shop, but also a better investment than Tiffany. Signet Jewelers (NYSE: SIG) announced earlier this year that it would acquire Zale Corp. (NYSE: ZLC). The move, which just cleared a regulatory hurdle, will bring together two of the largest jewelry retailers in the U.S. by market share. Generally, the acquiring company sees a pullback in its stock, while the company being acquired rises. However, shares of both Signet and Zale are up over 30% since the announcement. The market has taken the acquisition as a big positive.  Signet could see the benefits of the acquisition even sooner than normally would be expected, considering the move gives it an even bigger lead… Read More

The past month has been tough for tech stocks.  The Nasdaq composite index hit a recent peak of 4,358 on March 5 — but has slid more than 5% since then. That figure may be a bit deceiving. Many stocks in the tech index have managed to hold their ground, but some of the most richly valued tech stocks are now drifting quite far from their peaks.  Roughly three weeks ago, I took note of these slumps, and the selling has continued since then, with many of 2013’s hottest tech stocks now off 20% or more from their recent peaks. Read More

The past month has been tough for tech stocks.  The Nasdaq composite index hit a recent peak of 4,358 on March 5 — but has slid more than 5% since then. That figure may be a bit deceiving. Many stocks in the tech index have managed to hold their ground, but some of the most richly valued tech stocks are now drifting quite far from their peaks.  Roughly three weeks ago, I took note of these slumps, and the selling has continued since then, with many of 2013’s hottest tech stocks now off 20% or more from their recent peaks. #-ad_banner-#​To be sure, nobody would call these tech stocks bargains, even after they’ve sold off. But as these stocks grind lower, it’s time to assess which ones may be close to a floor and poised for a rebound. For example, Oppenheimer analyst Jason Helfstein, who previously rated Netflix (Nasdaq: NFLX) and Yelp (Nasdaq: YELP) as “perform” (meaning neutral), just boosted his ratings on these stocks to “outperform.” Regarding Netflix, he notes that the $120 plunge from a month ago is partially attributable to concerns that Amazon.com (Nasdaq: AMZN) will soon launch a set-top box suitable for video streaming,… Read More

It could be argued that Americans have long believed “we are what we own” — the bigger, the better; the more, the merrier. Some folks shell out a lot of money to have three or four cars sitting in the driveway, or vacation homes on both coasts. Often times, the cars sit idle and the homes empty for a good portion of the time. However, a monumental economic shift is underway and changing the face of consumerism as we know it. We can now reap the benefits of consumption without the costs of ownership. In fact, those unused… Read More

It could be argued that Americans have long believed “we are what we own” — the bigger, the better; the more, the merrier. Some folks shell out a lot of money to have three or four cars sitting in the driveway, or vacation homes on both coasts. Often times, the cars sit idle and the homes empty for a good portion of the time. However, a monumental economic shift is underway and changing the face of consumerism as we know it. We can now reap the benefits of consumption without the costs of ownership. In fact, those unused or rarely used items just taking up space in your life can begin to fill up your wallet.  This relatively new phenomenon is called consumer-to-consumer sharing. Owners rent out something they are not using — such as a car, a house, tools or a bicycle — using online peer-to-peer services. The go-between company typically has an eBay- or Yelp-style rating system so people on both sides of the transaction can trust each other.  The concept has taken on a life of its own. Forbes estimates that revenue flowing through the “share economy” directly into people’s bank accounts will surpass $3.5… Read More

Nick Dreystadt is an unsung hero of American business. In 1933, the engineer knocked on the boardroom door at General Motors (NYSE: GM) and asked to be heard for ten minutes. He said he could take GM’s most problematic division and make it profitable within 18 months. It was a bold move. The historian John Steele Gordon said Dreystadt’s intrusion into the exclusive confines of the boardroom was roughly akin to a lowly priest knocking on the door of the Sistine chapel to advise the cardinals while electing a pope. It was also a very bold claim: The GM division… Read More

Nick Dreystadt is an unsung hero of American business. In 1933, the engineer knocked on the boardroom door at General Motors (NYSE: GM) and asked to be heard for ten minutes. He said he could take GM’s most problematic division and make it profitable within 18 months. It was a bold move. The historian John Steele Gordon said Dreystadt’s intrusion into the exclusive confines of the boardroom was roughly akin to a lowly priest knocking on the door of the Sistine chapel to advise the cardinals while electing a pope. It was also a very bold claim: The GM division at issue commanded the highest prices, but it also shouldered the highest costs, and by a wide margin. Then there was the small matter of timing: It was the middle of the Great Depression. But Nick Dreystadt nevertheless thought he could sell Cadillacs. #-ad_banner-#His two-pronged plan was as simple as it was controversial. Dreystadt told the board he would end a longstanding GM policy that barred dealers from selling Cadillacs to African-Americans, thus opening up a huge new market. Affluent blacks, Dreystadt noted, could not move into “rich” neighborhoods. They couldn’t join country clubs. But many professionals could easily afford… Read More

Cellphones are everywhere — and everybody has the same problem…  #-ad_banner-#Getting the battery on their phones to last all day.  Finding a charger that will give you a quick boost is an even bigger problem. And if you’ve ever needed to charge your phone while you’re at an airport, good luck. Outlets at airports have become something of a grail.  But it’s not just about finding an outlet or a charger. It’s often even more important to get your device charged quickly.  One company that has developed a quick charger for the mobile market is little-known Power Integrations… Read More

Cellphones are everywhere — and everybody has the same problem…  #-ad_banner-#Getting the battery on their phones to last all day.  Finding a charger that will give you a quick boost is an even bigger problem. And if you’ve ever needed to charge your phone while you’re at an airport, good luck. Outlets at airports have become something of a grail.  But it’s not just about finding an outlet or a charger. It’s often even more important to get your device charged quickly.  One company that has developed a quick charger for the mobile market is little-known Power Integrations (Nasdaq: POWI).  While it might not be well known, the company has a market cap of just over $2 billion. Shares have also performed quite well over the past year and are up more than 50%. In that time, Power Integrations beat earnings estimates in three of the four quarters. For the full year 2014, earnings per share (EPS) are expected to come in at $2.72, which would be year-over-year growth of 10.5%.  To capture the market opportunity in cellphone charging, Power Integrations is teaming up with Qualcomm (Nasdaq:… Read More

In his book “One Up On Wall Street,” Peter Lynch said that he loved “boring” stocks because they were often overlooked by the excitement-seeking crowd. And it doesn’t get much more boring than today’s pick. #-ad_banner-#The company is a leading and highly profitable producer of fluid motion and control products in over 50 countries. It produces pumps, seals and valves for the oil and gas, chemical, water and power industries. Nothing exciting there, but both the technicals and fundamentals say the stock is an excellent trading opportunity. Flowserve (NYSE: FLS) pumps have some… Read More

In his book “One Up On Wall Street,” Peter Lynch said that he loved “boring” stocks because they were often overlooked by the excitement-seeking crowd. And it doesn’t get much more boring than today’s pick. #-ad_banner-#The company is a leading and highly profitable producer of fluid motion and control products in over 50 countries. It produces pumps, seals and valves for the oil and gas, chemical, water and power industries. Nothing exciting there, but both the technicals and fundamentals say the stock is an excellent trading opportunity. Flowserve (NYSE: FLS) pumps have some high-profile uses, such as making snow for ski hills at the Sochi Olympics. But the company’s bread-and-butter products are monitoring controls, valves and seals used in oil and gas exploration, from the ocean floor to the Canadian oil sands. Making the stock even more likely to fly below the radar is that management has been scaling back operations to sharpen its focus on key revenue-generating segments. In late March, Flowserve announced the divestment of its all-welded ball valve product line, Naval OY. The business was sold to a Finnish valve manufacturer for an undisclosed sum. The company also… Read More

I’ve long been an Apple (Nasdaq: AAPL) bear. But we’re all capable of change.  #-ad_banner-#When AAPL fell more than 40% to just under $400, the forward price-to-earnings (P/E) ratio fell to barely 10 and the dividend grew to just over 3%. The stock suddenly made sense from an investment standpoint, and I began including it in client portfolios.  Similarly, I was the lone Android user in a house full of iPhone users. But when my contract expired a few weeks ago and my carrier offered me a free iPhone 4S, I became an adopter (if not… Read More

I’ve long been an Apple (Nasdaq: AAPL) bear. But we’re all capable of change.  #-ad_banner-#When AAPL fell more than 40% to just under $400, the forward price-to-earnings (P/E) ratio fell to barely 10 and the dividend grew to just over 3%. The stock suddenly made sense from an investment standpoint, and I began including it in client portfolios.  Similarly, I was the lone Android user in a house full of iPhone users. But when my contract expired a few weeks ago and my carrier offered me a free iPhone 4S, I became an adopter (if not a fanboy).  Having used an Android device for a few years, I used Amazon.com’s (Nasdaq: AMZN) cloud music player and built a decent cloud library. When I switched to the iPhone and downloaded the Amazon cloud app, I was immediately bombarded by offers from Amazon to buy MP3 albums from my favorite artists at $5 a pop.  Amazon knew I had switched devices and wanted to keep me from straying to iTunes. So far, I’m still loyal.  But as an investor, I would buy Apple’s stock before Amazon’s. A few numbers explain why.   For the life of me,… Read More

My friend John just quit a 30-year addiction… The first time I met John was at a local poker tournament a few years ago. Of all the times I played with him, he was never once without a cigarette in his hand. So imagine my surprise when I rolled into the game last Friday and saw John sitting at the poker table… his cigarettes nowhere in sight. After 30 years, he had quit cold turkey. I was shocked. When I asked him why he stopped, he pulled out an electronic cigarette (e-cig) and gave it a puff — blowing the… Read More

My friend John just quit a 30-year addiction… The first time I met John was at a local poker tournament a few years ago. Of all the times I played with him, he was never once without a cigarette in his hand. So imagine my surprise when I rolled into the game last Friday and saw John sitting at the poker table… his cigarettes nowhere in sight. After 30 years, he had quit cold turkey. I was shocked. When I asked him why he stopped, he pulled out an electronic cigarette (e-cig) and gave it a puff — blowing the vapor right back into the bar. #-ad_banner-#My friend John isn’t the only former smoker who’s made the switch from traditional cigarettes to their electric counterparts. In Amy Calistri’s March issue of Stock of the Month, she told readers how she herself used the product to quit smoking last December: Last year, I started using an electronic cigarette sold by the tobacco company Lorillard (NYSE: LO). Over time, I went from using cartridges with medium amounts of nicotine (9 to 12 mg) to low amounts of nicotine (6 to 8 mg) to cartridges with no nicotine — basically just flavored… Read More

Although buy-and-hold stock investing has often been harshly criticized since the financial crisis, the backlash has been way overdone.  #-ad_banner-#I firmly believe this time-honored strategy still has plenty of merit — and the long-term record of one mutual fund that’s a perfect example of buy-and-hold conclusively proves this. Take one look at its turnover ratio, and you’ll know why I say this fund is a perfect example of buy-and-hold. The ratio is zero, meaning the fund never sells — ever. If that’s not buy-and-hold, then I don’t know what is. As the following table shows, the fund has… Read More

Although buy-and-hold stock investing has often been harshly criticized since the financial crisis, the backlash has been way overdone.  #-ad_banner-#I firmly believe this time-honored strategy still has plenty of merit — and the long-term record of one mutual fund that’s a perfect example of buy-and-hold conclusively proves this. Take one look at its turnover ratio, and you’ll know why I say this fund is a perfect example of buy-and-hold. The ratio is zero, meaning the fund never sells — ever. If that’s not buy-and-hold, then I don’t know what is. As the following table shows, the fund has more than kept pace with the market and nicely outperformed its peer group (the large value category) in the intermediate term. It has handily beaten the market and its peers in the long term. The fund’s 10-year record places it in the top 1% of the large value category, and its 15-year record is good for the top 10%. Annualized Rate of Return I’m talking about ING Corporate Leaders Trust (Nasdaq: LEXCX), a $1.6 billion fund that most investors probably haven’t heard of. But anyone who considers themselves buy-and-hold investors will want to be familiar with it. Read More