In doing a GARP screen the other day, I was surprised by the top five picks it turned up. But before I reveal their names, you might be wondering, “What the heck is GARP?”#-ad_banner-# If you’ve never heard of GARP, it has nothing to do with the John Irving novel “The World According to Garp.” GARP’s roots go back to a 1949 book, “The Intelligent Investor,” by Benjamin Graham, which has the distinction of being called “the best book on investing ever written” by… Read More

In doing a GARP screen the other day, I was surprised by the top five picks it turned up. But before I reveal their names, you might be wondering, “What the heck is GARP?”#-ad_banner-# If you’ve never heard of GARP, it has nothing to do with the John Irving novel “The World According to Garp.” GARP’s roots go back to a 1949 book, “The Intelligent Investor,” by Benjamin Graham, which has the distinction of being called “the best book on investing ever written” by Warren Buffett. Known as the father of security analysis and value investing, Graham believed investors should consider both future growth (measured through fundamentals) and present price of a stock to identify value. I set my GARP screen to evaluate companies based on dividend growth rate, trailing price-to-earnings (P/E) and price-to-book (P/B) ratios, earnings per share (EPS) growth,… Read More

Described as “a vulture, albeit a well-dressed one,” Wilbur Ross is also “one of the best bottom feeders in the business,” according to no less an authority than a fellow billionaire, real estate magnate Leonard Stern. These comparisons may seem unflattering,… Read More

Small companies typically outperform over time because they have greater growth prospects than the market leaders.  Between 1927 and 2012, for instance, small caps produced annual returns of 12.9%, compared with 9.9% for large companies. Even now, when many indices have hit highs, the S&P 600 Small Cap Index has gained 31%, in the past year compared with a 23% gain for the S&P 500 over the same period. #-ad_banner-#But most… Read More

Small companies typically outperform over time because they have greater growth prospects than the market leaders.  Between 1927 and 2012, for instance, small caps produced annual returns of 12.9%, compared with 9.9% for large companies. Even now, when many indices have hit highs, the S&P 600 Small Cap Index has gained 31%, in the past year compared with a 23% gain for the S&P 500 over the same period. #-ad_banner-#But most retail investors shy away from small caps mainly because they perceive them to be part of the seedy underbelly of investing, the world of pump-and-dump boiler rooms. That reputation is not entirely undeserved. Many illiquid companies exist whose financials are at best an educated guess.  So to find small-cap stocks that could be assumed to be reasonably safe investments, I used a several-step screening process, starting with solid fundamentals and substantial… Read More

We all know the value of investing in dividend stocks. That’s why I was intrigued by StreetAuthority expert Amy Calistri’s unorthodox idea about investing in stocks with low dividend yields. Her point: Lower-yielding stocks can outperform their higher-yielding counterparts. Amy’s not saying that all low dividend yield stocks were identical. In fact, she provided a four-step test for screening prospects to determine a stock‘s dividend track record, ensuring… Read More

We all know the value of investing in dividend stocks. That’s why I was intrigued by StreetAuthority expert Amy Calistri’s unorthodox idea about investing in stocks with low dividend yields. Her point: Lower-yielding stocks can outperform their higher-yielding counterparts. Amy’s not saying that all low dividend yield stocks were identical. In fact, she provided a four-step test for screening prospects to determine a stock‘s dividend track record, ensuring it had a low payout ratio and high revenue growth, as well as a compelling story for future growth. I ended up with three stocks I could confidently rate good, better and best. Here’s how I got there. I was expecting quite a few would survive the first test of paying and increasing dividends, and I wasn’t disappointed. I found 726 possible names on FINVIZ.com, which had a record of at least five years of increasing dividends. To add my own stamp to… Read More

The notorious bank robber Willie Sutton said he robbed banks “because that’s where the money is.” His words came to mind while I was thinking about which companies might benefit from rising interest rates. Certainly, banks have large cash balances, and for that reason, along with others — many of which were laid out recently by my colleague David Sterman — those institutions could be among the prime beneficiaries of soon-to-come higher interest rates. I… Read More

The notorious bank robber Willie Sutton said he robbed banks “because that’s where the money is.” His words came to mind while I was thinking about which companies might benefit from rising interest rates. Certainly, banks have large cash balances, and for that reason, along with others — many of which were laid out recently by my colleague David Sterman — those institutions could be among the prime beneficiaries of soon-to-come higher interest rates. I realized there are other pockets of hidden cash, less obvious than banks, that might benefit as much or more than banks when it comes to profiting from rising interest rates.#-ad_banner-# What other businesses have been sitting on huge sums of cash they can’t spend? Which companies have been forced to earn next to nothing in the form of interest — but should see a significant boost in their income streams as rates rise? Two came to mind. The first category you probably do business with often —… Read More

A recent fit of virtuous (if misguided) housecleaning ended up costing me $600, but what I learned in the process could provide you with a chance to get in on a secondary play of a recovering sector. It started when I decided to clean under the refrigerator for the first time in quite a while. I took my time sweeping up the accumulated gunk, vacuuming the coils and disinfecting the unit from top to bottom. But when I plugged the fridge back in, the outside began warming up and the inside stopped being cold. Some 24 hours and a half-dozen… Read More

A recent fit of virtuous (if misguided) housecleaning ended up costing me $600, but what I learned in the process could provide you with a chance to get in on a secondary play of a recovering sector. It started when I decided to clean under the refrigerator for the first time in quite a while. I took my time sweeping up the accumulated gunk, vacuuming the coils and disinfecting the unit from top to bottom. But when I plugged the fridge back in, the outside began warming up and the inside stopped being cold. Some 24 hours and a half-dozen Web searches later, I realized my mistake. To get under the unit, I tilted it and rested it on a chair while I cleaned. I’m not strong enough to hold the fridge up with one hand and sweep with the other, but tilting it had burned out the compressor, which moves the refrigerant through all those now-clean metal coils. Whoops. I decided it was time to buy a new fridge. Shopping for a new unit took me to several home improvement stores — and to my surprise, they were all jammed. Appliances, tools, paint and lumber — every section was… Read More

An official with the Securities and Exchange Commission — an agency not given to hyperbolic statements — said this $3.7 trillion market is facing an “Armageddon.”  In June alone, $5.4 billion flooded out of this market — more than was invested in all of 2012. Rising interest rates will likely depress the value of this market over the next few years. Not only that, but President Barack Obama wants some investors in this market to face an unprecedented penalty. Why should… Read More

An official with the Securities and Exchange Commission — an agency not given to hyperbolic statements — said this $3.7 trillion market is facing an “Armageddon.”  In June alone, $5.4 billion flooded out of this market — more than was invested in all of 2012. Rising interest rates will likely depress the value of this market over the next few years. Not only that, but President Barack Obama wants some investors in this market to face an unprecedented penalty. Why should you give it even a cursory glance? In 2012, this market finished a two-year run with an average 20% gain, according to Bank of America Merrill Lynch. It is one of the most trustworthy places to put your money, especially if you’re a retiree.#-ad_banner-# I’m talking about U.S. municipal bonds. Municipal bonds are issued by non-federal governmental entities to build roads, schools, hospitals and the like. In 2012, 6,600 tax-exempt municipal bonds financed more than $179 billion worth of infrastructure… Read More

Did you miss out on China’s unprecedented growth?  In the past decade and a half, China has sailed past Germany, France, Great Britain and Japan before settling in as the world’s second-largest economy behind the United States. If you missed out on that growth, were you put off from investing while many experts dithered about the reliability of official Chinese government data? It would have been nearly impossible for an individual investor to get in on China in 1998. The… Read More

Did you miss out on China’s unprecedented growth?  In the past decade and a half, China has sailed past Germany, France, Great Britain and Japan before settling in as the world’s second-largest economy behind the United States. If you missed out on that growth, were you put off from investing while many experts dithered about the reliability of official Chinese government data? It would have been nearly impossible for an individual investor to get in on China in 1998. The Xinhua China 25 Index (NYSE: FXI) made its debut in 2004 as the first Chinese exchange-traded fund (ETF), but it has had considerable downsides, including its fees and a high concentration in the financial space. As a proxy for investing in China since 2009, consider the SPDR S&P China ETF (NYSE: GXC), which has a more balanced portfolio than FXI. Read More

Did you miss out on China’s unprecedented growth?  In the past decade and a half, China has sailed past Germany, France, Great Britain and Japan before settling in as the world’s second-largest economy behind the United States. If you missed out on that growth, were you put off from investing while many experts dithered about the reliability of official Chinese government data? It would have been nearly impossible for an individual investor to get in on China in 1998. The… Read More

Did you miss out on China’s unprecedented growth?  In the past decade and a half, China has sailed past Germany, France, Great Britain and Japan before settling in as the world’s second-largest economy behind the United States. If you missed out on that growth, were you put off from investing while many experts dithered about the reliability of official Chinese government data? It would have been nearly impossible for an individual investor to get in on China in 1998. The Xinhua China 25 Index (NYSE: FXI) made its debut in 2004 as the first Chinese exchange-traded fund (ETF), but it has had considerable downsides, including its fees and a high concentration in the financial space. As a proxy for investing in China since 2009, consider the SPDR S&P China ETF (NYSE: GXC), which has a more balanced portfolio than FXI. Read More