To apply a shopworn phrase to the bull market of 2013:  “A rising tide lifted all boats.” #-ad_banner-# Or at least many of them. Investors gravitated toward almost any company that was delivering decent quarterly results, making it ever harder to spot deep value. Companies that stumbled through a series of challenging quarters, however, stayed in investors’ doghouse. Yet as the world’s top investors will tell you, real profits are made in the unloved stocks, not the loved ones. That was clearly logic in place for Bill Gates and his investment firm: While most investors were shunning heavy equipment maker Caterpillar… Read More

To apply a shopworn phrase to the bull market of 2013:  “A rising tide lifted all boats.” #-ad_banner-# Or at least many of them. Investors gravitated toward almost any company that was delivering decent quarterly results, making it ever harder to spot deep value. Companies that stumbled through a series of challenging quarters, however, stayed in investors’ doghouse. Yet as the world’s top investors will tell you, real profits are made in the unloved stocks, not the loved ones. That was clearly logic in place for Bill Gates and his investment firm: While most investors were shunning heavy equipment maker Caterpillar (NYSE: CAT), Gates and his team were loading up. Though Gates likely sees many virtues for Caterpillar, it’s the company’s financial firepower that may have held the greatest appeal. As I noted back in September, “Caterpillar’s cash flow is so robust that its dividend was hiked at a double-digit pace in 2012 and again in 2013, even as the company is in the midst of a $7.5 billion share buyback program.” Fast-forward to January, and Gates is looking wiser than most. Caterpillar just topped earnings per share (EPS) forecasts by more than 20%, leading to fresh surge in the stock. Read More

I’ve told you before about the enormous number of high-yielding stocks abroad. If you remember, my research team and I found only 25 profitable U.S. companies were paying yields of more than 12%… compared to 93 overseas. Although the numbers fluctuate daily, that means roughly 79% of the world’s highest yields are found outside of U.S. markets. To me, the amount of high-yield international dividend-payers out there is one of the market’s biggest secrets. But there’s another big potential benefit to investing in international companies that most investors fail to consider. #-ad_banner-#This simple move could make investors extra gains of… Read More

I’ve told you before about the enormous number of high-yielding stocks abroad. If you remember, my research team and I found only 25 profitable U.S. companies were paying yields of more than 12%… compared to 93 overseas. Although the numbers fluctuate daily, that means roughly 79% of the world’s highest yields are found outside of U.S. markets. To me, the amount of high-yield international dividend-payers out there is one of the market’s biggest secrets. But there’s another big potential benefit to investing in international companies that most investors fail to consider. #-ad_banner-#This simple move could make investors extra gains of 10% or more — even in a single year. It doesn’t require any extra effort… in fact, it happens automatically when you invest in international companies. Here’s how it works… Say five years ago you took the trip of a lifetime to Australia. Back then, $1.00 Australian was worth roughly $0.65 U.S. dollars. That means a hotel room priced at $100 Australian dollars only cost about $65 U.S. dollars thanks to a favorable exchange rate. But today, the Australian dollar has increased while the U.S. dollar has plummeted in value. Just $1.00 Australian is now worth $0.91 U.S. dollars. Read More

Although flying is one of the most attractive ways to travel, the airline industry has been one of the worst investments over the past decade.#-ad_banner-#​ Yet thanks to consolidation, the industry is getting more rational. With fewer airlines competing for customer dollars, the number of available seats should fall more in line with demand. This will allow the current operators the ability to maintain strong pricing and avoid having to drop prices to fill seats.  Given this newfound rationality, combined with a stabilizing of fuel prices and a potential rebounding of the economy, the airline industry could be… Read More

Although flying is one of the most attractive ways to travel, the airline industry has been one of the worst investments over the past decade.#-ad_banner-#​ Yet thanks to consolidation, the industry is getting more rational. With fewer airlines competing for customer dollars, the number of available seats should fall more in line with demand. This will allow the current operators the ability to maintain strong pricing and avoid having to drop prices to fill seats.  Given this newfound rationality, combined with a stabilizing of fuel prices and a potential rebounding of the economy, the airline industry could be a great investment over the next few years. The other beauty of the industry is the strong barriers to entry. Airports have a limited number of takeoff and landing slots, and the major airlines enjoy long-term leases on airport gates that help shut out the competition.  Southwest Airlines (NYSE: LUV) is one of the best picks in the industry given its stronghold on the short-haul market and renewed focus for returning capital to shareholders. The fact that it tailors to the short-haul market helps it keep fuel costs down and enjoy the lowest cost structure of the major airlines.  The… Read More

Investing can be exciting, but most of the time, the real winners are more staid if not outright boring. After all, Tesla (Nasdaq: TSLA) selling electric cars is fun. Bonds are for widows and orphans (or so the conventional wisdom goes).#-ad_banner-# If you like making money, whether in the form of capital gains or dividends, then I have a boring stock for you. Actually, it is a closed-end fund, but it pays a nice dividend and just broke out from a technical basing pattern. The Nuveen Quality Preferred Income Fund (NYSE: JTP) invests primarily in preferred… Read More

Investing can be exciting, but most of the time, the real winners are more staid if not outright boring. After all, Tesla (Nasdaq: TSLA) selling electric cars is fun. Bonds are for widows and orphans (or so the conventional wisdom goes).#-ad_banner-# If you like making money, whether in the form of capital gains or dividends, then I have a boring stock for you. Actually, it is a closed-end fund, but it pays a nice dividend and just broke out from a technical basing pattern. The Nuveen Quality Preferred Income Fund (NYSE: JTP) invests primarily in preferred stocks, and it has most of the characteristics I like to see in a stock or fund. No doubt, income-producing investments such as Treasury bonds and utility stocks were out of favor for much of the past year. Between May and August of last year, JTP shed more than 20%. But since August, trading has taken place in a range. Chart watchers call that a base, and the longer it lasts, the longer the rally should last if and when it finally breaks out. That breakout happened in JTP earlier this week and on nice volume. The past… Read More

There is perhaps no better investment opportunity than when a company comes out and says it’s worth more after receiving a takeover offer. This is especially true when there are a number of suitors for that same company. #-ad_banner-#​In these situations, the “belle of the ball” becomes sought after, and the bidding war begins. The highest bidder wins the prize — and shareholders make off with a bunch of money and profits. This could well be what plays out with Time Warner Cable (NYSE: TWC). Charter Communications (Nasdaq: CHTR), backed by billionaire John Malone’s Liberty Media… Read More

There is perhaps no better investment opportunity than when a company comes out and says it’s worth more after receiving a takeover offer. This is especially true when there are a number of suitors for that same company. #-ad_banner-#​In these situations, the “belle of the ball” becomes sought after, and the bidding war begins. The highest bidder wins the prize — and shareholders make off with a bunch of money and profits. This could well be what plays out with Time Warner Cable (NYSE: TWC). Charter Communications (Nasdaq: CHTR), backed by billionaire John Malone’s Liberty Media (Nasdaq: LMCA), has offered to buy Time Warner Cable for $132.50 a share. If Time Warner Cable and Charter can swing a deal, the combined company would have cable systems stretching from Maine to California. However, TWC rejected Charter’s bid as too low; TWC is looking for $160 a share. The most interesting aspect of the Charter offer is that it’s an opening bid, which is a bid that gets the two sides to the negotiating table.  Another company that is interested in buying Time Warner Cable is Comcast Corp. (Nasdaq: CMCSA). Comcast is the largest cable provider in the… Read More

Dividends, those seemingly tiny cash payouts to company shareholders, have been the lifeblood of stock market returns over the past 80 years. #-ad_banner-#In today’s age of ultra-low Treasury yields, nearly nonexistent fixed-income payouts and near-zero interest rates, the yield provided by dividend-paying stocks has become even more critical for investors seeking above-market returns. A look at the historical picture between 1930 and 2010 shows that dividends accounted for 44% of the market’s returns in that time. In the lackluster stock markets of the 1970s, dividends provided 71% of returns. That’s an astounding number, no matter how it is… Read More

Dividends, those seemingly tiny cash payouts to company shareholders, have been the lifeblood of stock market returns over the past 80 years. #-ad_banner-#In today’s age of ultra-low Treasury yields, nearly nonexistent fixed-income payouts and near-zero interest rates, the yield provided by dividend-paying stocks has become even more critical for investors seeking above-market returns. A look at the historical picture between 1930 and 2010 shows that dividends accounted for 44% of the market’s returns in that time. In the lackluster stock markets of the 1970s, dividends provided 71% of returns. That’s an astounding number, no matter how it is crunched.  As you can see in this chart, dividend-paying companies have outperformed the overall market by 155% between 1972 and 2012:  Source: Dreyfus Corp. While 2013 was a banner year for dividends, the positive trend is slated to continue throughout 2014. Research firm Markit forecasts that S&P 500 dividends are expected to increase by 8.9%, to $352 billion. Regular readers of Amy Calistri’s Daily Paycheck advisory understand the importance of dividends, know which stocks the smart money is buying — and even understand the occasional dangers of high-yielding stocks. Let me explain.  High dividends do not… Read More

“One man’s trash is another man’s treasure.” That’s an appropriate saying for an investor looking for bargains in the stock market. I spend a lot of time looking through beaten-down stocks trying to find an overlooked jewel. I believe I found one recently in Penn West Petroleum (NYSE: PWE), which many investors have been throwing into the trash bin. #-ad_banner-#Shares of Penn West would need to triple to get back to where they were just two years ago — but I think that triple is possible.   I’m not suggesting it will happen overnight, but with… Read More

“One man’s trash is another man’s treasure.” That’s an appropriate saying for an investor looking for bargains in the stock market. I spend a lot of time looking through beaten-down stocks trying to find an overlooked jewel. I believe I found one recently in Penn West Petroleum (NYSE: PWE), which many investors have been throwing into the trash bin. #-ad_banner-#Shares of Penn West would need to triple to get back to where they were just two years ago — but I think that triple is possible.   I’m not suggesting it will happen overnight, but with the plan that Penn West has in place, it can happen. The nice part about Penn West is that as an investor buying today, you can lock in a 7% dividend yield. That means you get paid nicely while you wait for the plan to be executed and the shares to go up. What Caused PWE To Collapse? I’m bullish on Penn West going forward, but I don’t dispute for a minute that the share price drop over the past two years was warranted. This is a company that has struggled mightily. Shareholders are right to feel… Read More

Today, I’m going to let you in on one of the market’s best-kept secrets… It turns out investors are willing to pay you to sell stocks you already own at a profit.  You read that right. And you want to know the funny thing? Oftentimes, you don’t even have to end up selling. You simply take their money. And rest assured, it’s all perfectly legal. I can’t believe investors are missing out on these payments…  #-ad_banner-#For those who are unfamiliar with this simple technique, it may sound strange. But savvy investors are using it to generate thousands of dollars in… Read More

Today, I’m going to let you in on one of the market’s best-kept secrets… It turns out investors are willing to pay you to sell stocks you already own at a profit.  You read that right. And you want to know the funny thing? Oftentimes, you don’t even have to end up selling. You simply take their money. And rest assured, it’s all perfectly legal. I can’t believe investors are missing out on these payments…  #-ad_banner-#For those who are unfamiliar with this simple technique, it may sound strange. But savvy investors are using it to generate thousands of dollars in extra income every year. It’s one of the easiest and safest ways to generate 20%-plus returns on a regular basis. Once you’ve mastered the technique, I wouldn’t be surprised if you stopped trading stocks or buying and holding investments.  That’s how powerful this strategy is: it can drastically improve the way you make money in the markets. That goes for conservative income investors and aggressive traders alike.  The technique involves selling options — specifically covered calls. A call option gives the buyer the right — but not the obligation — to buy a stock from the call seller if it’s… Read More

Now that the busy holiday shopping season is behind us, it’s time to look at which department store retailers are set up for the long haul.#-ad_banner-# Investing for the long run involves sticking with a retailer known for consistency in terms of product offerings, management and price. For investors, what makes a great retail investment is a nice dividend, strong balance sheet and robust returns on equity. These days, most department store retailers lack these qualities, especially J.C. Penney (NYSE: JCP) and Sears (NYSE: SHLD). The one department store retailer that shoppers and investors alike can count on is Macy’s… Read More

Now that the busy holiday shopping season is behind us, it’s time to look at which department store retailers are set up for the long haul.#-ad_banner-# Investing for the long run involves sticking with a retailer known for consistency in terms of product offerings, management and price. For investors, what makes a great retail investment is a nice dividend, strong balance sheet and robust returns on equity. These days, most department store retailers lack these qualities, especially J.C. Penney (NYSE: JCP) and Sears (NYSE: SHLD). The one department store retailer that shoppers and investors alike can count on is Macy’s (NYSE: M). Macy’s possesses all the necessary qualities based on value and growth. Going forward, Macy’s has a number of initiatives to drive both its top and bottom lines. The retailer performed well during the holiday season, executing on its Black Friday platform and various strategies. The department store retailer recently announced November and December (holiday season) sales, which revealed that comparable-store sales were up 3.6% year over year. If you include sales from licensed departments within Macy’s, comparable-store sales rose 4.3%. Several Growth Measures In Place Macy’s primary focus is its My Macy’s program, which is focused on… Read More

Over the past decade, we’ve spent a considerable amount of time researching master limited partnerships (MLPs). They’ve emerged as a popular way to benefit from our nation’s rapidly growing energy infrastructure. Most MLPs are focused on the energy sector, though some are involved in real estate and other entities (such as pro basketball’s Boston Celtics). #-ad_banner-#MLPs have soared in popularity as they’ve delivered stellar returns. According to the National Association of Publicly Traded Partnerships, the Alerian MLP Index (a proxy for almost all publicly traded energy MLPs) delivered a 16.5% annualized gain in the 10 years ended December 2012. That… Read More

Over the past decade, we’ve spent a considerable amount of time researching master limited partnerships (MLPs). They’ve emerged as a popular way to benefit from our nation’s rapidly growing energy infrastructure. Most MLPs are focused on the energy sector, though some are involved in real estate and other entities (such as pro basketball’s Boston Celtics). #-ad_banner-#MLPs have soared in popularity as they’ve delivered stellar returns. According to the National Association of Publicly Traded Partnerships, the Alerian MLP Index (a proxy for almost all publicly traded energy MLPs) delivered a 16.5% annualized gain in the 10 years ended December 2012. That beat the annualized gains of commodities (10.6%), small cap stocks (9.7%), the S&P 500 (7.1%) and hedge funds (6.8%). Many of our favorite MLPs continue to possess robust growth prospects in the years ahead as well, thanks to industry plans to dig for more oil and gas and to build more pipelines to transport these energy sources. The appeal of these MLPs is self-evident: They offer juicy dividend yields and are structured to avoid paying income taxes. That second factor can also be seen as a clear negative: Since they don’t pay taxes on their profits,… Read More