I’ve always preferred the view that the market is a “market of stocks” rather than a “stock market.” Let me explain… The market is a store like any other. Some merchandise is priced at a premium because of demand. Some merchandise is discounted due to lack of interest. That doesn’t necessarily mean it’s not needed or useful. Since imploding in 2008 and 2009, the S&P 500 is up over 130% over the past five years. #-ad_banner-#Some higher-beta names (so called due to the likeliness of greater volatility in the stock price), such as Tesla Motors (Nasdaq: TSLA) and… Read More

I’ve always preferred the view that the market is a “market of stocks” rather than a “stock market.” Let me explain… The market is a store like any other. Some merchandise is priced at a premium because of demand. Some merchandise is discounted due to lack of interest. That doesn’t necessarily mean it’s not needed or useful. Since imploding in 2008 and 2009, the S&P 500 is up over 130% over the past five years. #-ad_banner-#Some higher-beta names (so called due to the likeliness of greater volatility in the stock price), such as Tesla Motors (Nasdaq: TSLA) and Netflix (Nasdaq: NFLX), are up five or 10 times that. Needless to say, the valuations of those stocks, as measured by their forward price-to-equity (P/E) ratios have been lifted to the stratosphere. Tesla (which I profiled earlier this month) sports a forward P/E of 119, while Netflix has a forward P/E of around 93. This means that investors are all too eager to pay way too much for the earnings streams those companies may be able to deliver. It’s no surprise that as the market nervously digested the most recent comments from new Federal Reserve Chairman Janet Yellen concerning the… Read More

I’m a big follower of music, not only for enjoyment — but also because I believe it’s an industry that teaches a lot about the importance of mass appeal in investing. There’s a story I read recently about an aspiring star who sits down with a top music producer — the producer immediately pulls out a series of flash cards — and asks the would-be artist to look through them. Doing so, the young man finds black-and-white silhouettes of well-known rap stars, which the producer immediately began to quiz him on: “Who’s that? Who’s this?” The upstart names each one,… Read More

I’m a big follower of music, not only for enjoyment — but also because I believe it’s an industry that teaches a lot about the importance of mass appeal in investing. There’s a story I read recently about an aspiring star who sits down with a top music producer — the producer immediately pulls out a series of flash cards — and asks the would-be artist to look through them. Doing so, the young man finds black-and-white silhouettes of well-known rap stars, which the producer immediately began to quiz him on: “Who’s that? Who’s this?” The upstart names each one, easily. Identifying exactly who the artists are, even without faces — by zeroing in on telltale features like a trademark hat, a signature necklace or a unique pose. At which point the producer leans in and says, “Exactly. How are people going to recognize you?” His point was this: To be appealing and memorable, a brand needs to hold certain qualities and be easy to define. The same is true of great businesses. The most successful businesses in the world — and usually some of the best investments — have brands that are easy to define and possess just a… Read More

It may be just a coincidence, but soon after a key financial agency cautioned investors about the risks in business development companies (BDCs), these investments lost some of the momentum they had seen in 2010 through 2012. #-ad_banner-#Though many these of stocks are unlikely to deliver the sharp gains they saw in the first few years after the Great Recession, solid values still remain among a few of them. Too Much Leverage? Back in January 2013, the Financial Industry Regulatory Authority (FINRA) expressed concern that these companies carried a lot more risk than investors realized:… Read More

It may be just a coincidence, but soon after a key financial agency cautioned investors about the risks in business development companies (BDCs), these investments lost some of the momentum they had seen in 2010 through 2012. #-ad_banner-#Though many these of stocks are unlikely to deliver the sharp gains they saw in the first few years after the Great Recession, solid values still remain among a few of them. Too Much Leverage? Back in January 2013, the Financial Industry Regulatory Authority (FINRA) expressed concern that these companies carried a lot more risk than investors realized: “Fueled by the availability of low-cost financing, BDCs run the risk of over-leveraging their relatively illiquid portfolios.” Indeed, the high use of leverage turned out to be an Achilles’ heel back in 2008 as a number of BDCs’ portfolio holdings began to show signs of stress. Fearing that the BDCs would develop cash crunches, investors fled these stocks, some of which lost 80% or more of their value. These days, few such concerns seem to exist. Many corporations have either reduced debt or extended maturities at lower rates. But the smaller, privately held companies that BDCs both lend to and… Read More

December 2, 2004 was a pretty good day for Steve Ballmer. On that day, the 49-year-old CEO of Microsoft received a dividend check worth $1.2 billion.  Bill Gates, co-founder and Chairman of Microsoft at the time also got a big check. He collected more money in dividends than most people could earn in a thousand lifetimes — nearly $3.4 billion.  If you think these two men received these checks because they were Microsoft executives who owned a lot of company stock, you’re right… but only partially.  There’s another reason they got this massive payday… a reason that could bring you… Read More

December 2, 2004 was a pretty good day for Steve Ballmer. On that day, the 49-year-old CEO of Microsoft received a dividend check worth $1.2 billion.  Bill Gates, co-founder and Chairman of Microsoft at the time also got a big check. He collected more money in dividends than most people could earn in a thousand lifetimes — nearly $3.4 billion.  If you think these two men received these checks because they were Microsoft executives who owned a lot of company stock, you’re right… but only partially.  There’s another reason they got this massive payday… a reason that could bring you thousands of dollars in 2014. #-ad_banner-#As you know, most dividend-paying stocks pay quarterly. Occasionally, you’ll find a stock that pays monthly. To most investors, that’s as good as income investing gets.  But what the majority of investors don’t realize is this: The stocks that give you the most potential for low-risk, high yields of 10% or more are from companies that have boatloads of cash and a history of paying special dividends.  In fact, it’s entirely possible to collect 9 years of quarterly dividend payments (or more) in just one day by investing in dividend payers like this, which I’ll… Read More

One thing is for sure: People need to eat. #-ad_banner-#The best way to get a feel for the space is to look at the shelves and freezer section of your grocer. You’ll likely find that many items in your shopping cart are owned by the same company. I’m talking about one company in particular that makes everything from rolls and pasta to salad dressing and frozen noodles. This year is shaping up to be a great one for Ohio-based Lancaster Colony Corp. (Nasdaq: LANC). First, the company reported earnings per share (EPS) for its fiscal second quarter that beat Wall… Read More

One thing is for sure: People need to eat. #-ad_banner-#The best way to get a feel for the space is to look at the shelves and freezer section of your grocer. You’ll likely find that many items in your shopping cart are owned by the same company. I’m talking about one company in particular that makes everything from rolls and pasta to salad dressing and frozen noodles. This year is shaping up to be a great one for Ohio-based Lancaster Colony Corp. (Nasdaq: LANC). First, the company reported earnings per share (EPS) for its fiscal second quarter that beat Wall Street’s estimates by $0.23. Second, the company sold its candle division, netting more than $25 million. A Food Company With A Strong Balance Sheet Lancaster Colony is now a pure play in the food industry, and will likely be making a transformative acquisition this year. The company’s EPS for the second quarter came in at $1.44, up 12.5% from the prior year, and net sales increased 3%, coming in at a company-record $336 million. The company’s balance sheet remains ironclad with $176 million in cash (not including the sale of the candle division) and no debt. Cash flow for… Read More

The real estate investment trust (REIT) is one of more misunderstood asset classes. #-ad_banner-#There’s an undue amount of confusion with these companies — but they may be some of the simplest types of stocks out there. A REIT is a company that owns a portfolio of real estate properties that generate income from rentals and capital appreciation when the property is sold. A REIT must pass on 90% or more of its profits on to investors because of its unique tax structure, making them a staple in any dividend-oriented portfolio. Investors have shied away from anything remotely attached to mortgages… Read More

The real estate investment trust (REIT) is one of more misunderstood asset classes. #-ad_banner-#There’s an undue amount of confusion with these companies — but they may be some of the simplest types of stocks out there. A REIT is a company that owns a portfolio of real estate properties that generate income from rentals and capital appreciation when the property is sold. A REIT must pass on 90% or more of its profits on to investors because of its unique tax structure, making them a staple in any dividend-oriented portfolio. Investors have shied away from anything remotely attached to mortgages since the 2008 financial crisis. This can be clearly seen by looking at the Vanguard REIT Index ETF (NYSE: VNQ). In the past two years, this exchange-traded fund rose just 15% compared with the S&P 500’s climb of about 38%. Adding to the issue is the Federal Reserve’s taper of its quantitative easing program and expected rise in interest rates, which is adding more skepticism to the sector. REITs have been a “hated” sector for years, but the trend should start to reverse. Interest rates may be rising, but they are still at historic lows, and… Read More

It’s one of the most controversial stocks we cover…  And any time we mention it, you can be sure we’ll get a couple of angry emails from readers, questioning our morals or ethics.  While I understand the feelings behind those emails, to put it simply, our job at StreetAuthority is to give you the most timely and profitable investment advice available.  And we wouldn’t be doing our job if we neglected to tell you about it simply because of its “controversy.”  That’s why we’re always careful to point out that, while this stock may not be for everyone, there’s a… Read More

It’s one of the most controversial stocks we cover…  And any time we mention it, you can be sure we’ll get a couple of angry emails from readers, questioning our morals or ethics.  While I understand the feelings behind those emails, to put it simply, our job at StreetAuthority is to give you the most timely and profitable investment advice available.  And we wouldn’t be doing our job if we neglected to tell you about it simply because of its “controversy.”  That’s why we’re always careful to point out that, while this stock may not be for everyone, there’s a reason why we call it “the most shareholder-friendly company on Earth.”  It’s not hard to understand this when you look at the facts. In just six years, the company has raised its dividend 104% and bought back 438 million shares of stock. Its shares have also returned roughly 100% since 2008 — beating the market by nearly double. #-ad_banner-# The stock I’m referring to is Philip Morris International (NYSE: PM).  Now, before I go any further, let me state this again… I understand not everyone likes investing in cigarette manufacturers. And that’s fine.  But when you look at the ways… Read More

Recently, we told you a story about a select group of traders who have effectively “stolen” thousands of dollars from Wall Street. By performing these “heists,” as we call them, these traders have scored annual gains of 78.8%… 125.6%… and some are even earning returns (regularly, mind you) as high as 212.2%. The best part about these “heists” is that you can do them yourself. You don’t need a million-dollar brokerage account or access to a high-powered financial adviser. All you need is an open mind and the willingness to try a new investing strategy. For example, one of our… Read More

Recently, we told you a story about a select group of traders who have effectively “stolen” thousands of dollars from Wall Street. By performing these “heists,” as we call them, these traders have scored annual gains of 78.8%… 125.6%… and some are even earning returns (regularly, mind you) as high as 212.2%. The best part about these “heists” is that you can do them yourself. You don’t need a million-dollar brokerage account or access to a high-powered financial adviser. All you need is an open mind and the willingness to try a new investing strategy. For example, one of our subscribers, Texas hospital worker Duane S., told us how he used these “heists” to earn $2,000 from the market last month: “This was my first time, and it was easy!” Or how about the story of 1st Sgt. Rory D., who has been able to “steal” $10,000 through these “heists” since he started doing them a few years ago. As Rory said: “I had no problems learning [this strategy]. I have made over $10,000 so far.” But before I go any further, I want to clarify that when I say “steal,” I’m not implying these traders did anything wrong. The… Read More

Just a few years ago, a select group of companies started doing something extraordinary… They created a “Dividend Vault” with billions of dollars inside it — one of the largest cash stockpiles on earth. They did it because these companies have seen the same problems you have over the past decade — a mounting debt crisis in America and Europe… gridlock on Capitol Hill… a stock market that plummeted 40% from the housing bubble burst… to name just a few. Facing these challenges and many more, they took action to protect themselves and their shareholders. #-ad_banner-#Now, after years of quietly… Read More

Just a few years ago, a select group of companies started doing something extraordinary… They created a “Dividend Vault” with billions of dollars inside it — one of the largest cash stockpiles on earth. They did it because these companies have seen the same problems you have over the past decade — a mounting debt crisis in America and Europe… gridlock on Capitol Hill… a stock market that plummeted 40% from the housing bubble burst… to name just a few. Facing these challenges and many more, they took action to protect themselves and their shareholders. #-ad_banner-#Now, after years of quietly socking away billions of dollars, U.S. companies have an incredible $1.925 trillion held within the “Dividend Vault,” or enough money to give every retiree in America a check for $112,264. (To read my previous article on the “Dividend Vault,” go here.) And now, with few other options for growth, many of these companies have finally started opening the “Dividend Vault” to pay investors directly in the form of dividends.  Today I’d like to tell you about one company that holds an exceptionally large share of the “Dividend Vault”… This well-known tech giant is one of the world’s largest Internet equipment… Read More

Rising rates have investors spooked from buying real estate investment trusts (REITS), with $384 million of outflows in U.S. REIT funds in January alone. The fear is that higher rates will raise financing costs for highly leveraged real estate holdings, which will in turn limit distributions. #-ad_banner-#This may be true in theory, but investors are overlooking extremely strong catalysts for growth and historical returns that are hard to beat. The National Association of Real Estate Investment Trusts (NAREIT) monitors sector returns. Its index of equity REITs has outperformed the S&P 500, the Russell 2000 and the… Read More

Rising rates have investors spooked from buying real estate investment trusts (REITS), with $384 million of outflows in U.S. REIT funds in January alone. The fear is that higher rates will raise financing costs for highly leveraged real estate holdings, which will in turn limit distributions. #-ad_banner-#This may be true in theory, but investors are overlooking extremely strong catalysts for growth and historical returns that are hard to beat. The National Association of Real Estate Investment Trusts (NAREIT) monitors sector returns. Its index of equity REITs has outperformed the S&P 500, the Russell 2000 and the Barclays Aggregate Bond indices over the 10-, 20- and 30-year periods. Over the 40 years to 2010, the NAREIT index has provided annualized income returns of 8.3% and an annualized price return of 5.5%. On that backdrop of strong historical returns, there is one segment of the real estate market that has never really been accessible to retail investors like you and me. Unless you are an accredited investor (or your last name is Trump), you most likely haven’t been able to build a portfolio of single-family rental houses. Private equity and other institutional investors have been pouring money into… Read More