After six months of investors sitting on the edge of their seats, watching tobacco stock prices climb, it’s finally here…  #-ad_banner-#The Big Tobacco merger. The second-largest U.S. tobacco company, Reynolds American (NYSE: RAI), has agreed to buy Lorillard (NYSE: LO), the third-largest U.S. tobacco company, in a deal valued at more than $27 billion. Assuming it passes regulatory scrutiny, the deal is expected to close in the first half of next year. The combined company would dominate the U.S. tobacco market, producing two of the three leading U.S. brands of cigarettes: Camel and Newport. (The top-selling brand, Marlboro, is produced… Read More

After six months of investors sitting on the edge of their seats, watching tobacco stock prices climb, it’s finally here…  #-ad_banner-#The Big Tobacco merger. The second-largest U.S. tobacco company, Reynolds American (NYSE: RAI), has agreed to buy Lorillard (NYSE: LO), the third-largest U.S. tobacco company, in a deal valued at more than $27 billion. Assuming it passes regulatory scrutiny, the deal is expected to close in the first half of next year. The combined company would dominate the U.S. tobacco market, producing two of the three leading U.S. brands of cigarettes: Camel and Newport. (The top-selling brand, Marlboro, is produced by Altria Group (NYSE: MO).) It’s one of the more complicated buyout offers in recent memory, involving four of the five biggest U.S. purveyors of tobacco products. To minimize antitrust issues, Reynolds and Lorillard both will sell assets to Imperial Tobacco Group (OTC: ITYBY). Concurrently, British American Tobacco (NYSE: BTI) plans to purchase a large amount of Reynolds shares. Reynolds American  Key to the acquisition is Reynolds’ reach for Lorillard’s leading menthol brand, Newport, giving it 62% of the menthol market. At a time when traditional cigarette sales are consistently trending downward, menthol cigarettes are both profitable and gaining… Read More

I was chatting with a wealthy friend last week about the portfolio returns on my website. He interrupted me with an odd question: “Yeah, but how much did a millionaire make?!” #-ad_banner-#I wasn’t quite following him, and then it struck me. He was under the impression that large stock transactions earn a higher percentage of profit than small transactions do. And he was wrong. My friend is a self-made man, with several successful careers under his belt… but clearly none of them required a good working knowledge of math. When a stock goes up… Read More

I was chatting with a wealthy friend last week about the portfolio returns on my website. He interrupted me with an odd question: “Yeah, but how much did a millionaire make?!” #-ad_banner-#I wasn’t quite following him, and then it struck me. He was under the impression that large stock transactions earn a higher percentage of profit than small transactions do. And he was wrong. My friend is a self-made man, with several successful careers under his belt… but clearly none of them required a good working knowledge of math. When a stock goes up 10%, all shareholders make 10% profit — from the millionaire down to the guy who owns just one share. For example, Gilead Sciences (NYSE: GILD) is up 13.6% since I wrote about it a couple of months ago. All investors who bought then are up 13.6%, with slight variations based on transaction fees. (Fees are a factor, yes, but you can’t assume that the rich guy pays lower fees. As a matter of fact, small investors often manage their own accounts, with ridiculously low transaction fees, and millionaires frequently pay somebody an annual fee to manage their accounts. The case… Read More

After a prolonged worldwide economic slump, we’re finally seeing some consistent growth. #-ad_banner-#Growth in corporate sales and earnings, and in U.S. stock market averages, is on an undeniable upward trend. The benchmark S&P, Dow and Nasdaq indices all broke out of trading ranges during the past six weeks and are reaching annual highs. Yet this growth isn’t happening rapidly — and that’s good news for investors, because rapid upward swings in the stock market often lead to rapid market corrections.  Instead, the market’s made slow progress this year, going through a couple of corrections in February and April, then… Read More

After a prolonged worldwide economic slump, we’re finally seeing some consistent growth. #-ad_banner-#Growth in corporate sales and earnings, and in U.S. stock market averages, is on an undeniable upward trend. The benchmark S&P, Dow and Nasdaq indices all broke out of trading ranges during the past six weeks and are reaching annual highs. Yet this growth isn’t happening rapidly — and that’s good news for investors, because rapid upward swings in the stock market often lead to rapid market corrections.  Instead, the market’s made slow progress this year, going through a couple of corrections in February and April, then trading sideways in apparent preparation for the current upward move. One of the market sectors heading upward is specialty metals — and in that sector, I love Allegheny Technologies (NYSE: ATI), an undervalued gem (and one that I happen to hold in a personal model portfolio comprising what I think are this year’s best stocks for growth and income). Allegheny is a global leader in specialty metals and components. Its products include titanium and nickel alloys and a variety of steel products and other metals. The aerospace and defense industries make up Allegheny’s biggest customer base,… Read More

I’ve been investing in stocks for decades. I’m just as excited about owning stocks today as I was when I was a secretary opening my first investment account on my lunch hour in 1987. #-ad_banner-#I’ve learned an awful lot about the stock market over the years. It’s just as hard to master an understanding of the investment world as it is to master engineering, or cooking, or psychology. There’s no substitute for the time and energy invested in studying your craft. Recently, people have said these exact words to me: • “There WILL be a 10% correction soon.”… Read More

I’ve been investing in stocks for decades. I’m just as excited about owning stocks today as I was when I was a secretary opening my first investment account on my lunch hour in 1987. #-ad_banner-#I’ve learned an awful lot about the stock market over the years. It’s just as hard to master an understanding of the investment world as it is to master engineering, or cooking, or psychology. There’s no substitute for the time and energy invested in studying your craft. Recently, people have said these exact words to me: • “There WILL be a 10% correction soon.” • “The market looks like it’s about to fall.” • “The market is down this year.” If I may gently address these fallacies, the market is not down this year. The S&P 500 Index is up 5.5%, and the Dow Jones Industrial Average is up 2.1%. The S&P 500 and the Dow have had bullish trading patterns over the past several months that have broken out to the upside in recent weeks. All in all, the market has formed a nice base — so no, the market does not look like it’s about to fall.   It has actually just begun… Read More

I have three chart services at my fingertips — but for me, reviewing charts is a visual thing. After 26 years of deciphering stock charts, recognizing the patterns has become second nature. #-ad_banner-#Every weekend, I screen all the growth stocks that I follow to see which charts are on the verge of breaking out. I then take the stocks with good-looking charts and review their fundamentals. I’m looking for stocks with projected earnings growth (plus dividends) of 15% or more for each of the next three years. My goal is to identify the stocks that have the best chance of… Read More

I have three chart services at my fingertips — but for me, reviewing charts is a visual thing. After 26 years of deciphering stock charts, recognizing the patterns has become second nature. #-ad_banner-#Every weekend, I screen all the growth stocks that I follow to see which charts are on the verge of breaking out. I then take the stocks with good-looking charts and review their fundamentals. I’m looking for stocks with projected earnings growth (plus dividends) of 15% or more for each of the next three years. My goal is to identify the stocks that have the best chance of going up immediately. The charts tell me which stocks are going up, and the earnings growth verifies that the stocks have a good reason to go up. Now I’ve got my buy list for the week. I then review the larger list of stocks that made the first cut-off — the ones with the bullish charts — and group them into industries to see which trends materialize. Whichever industry is leading, I do more research among the major stocks in that industry to find a few more good investment ideas. Earlier this year, oilfield services companies — Baker Hughes (NYSE:… Read More

If you’ve been paying attention to the biotech and pharmaceutical space over the past few months (like my colleague David Sterman surely has), you know that these stocks have been hammered amid a sector rotation into late-cycle stocks.  #-ad_banner-#Big, profitable companies like Amgen (Nasdaq: AMGN), Biogen Idec (Nasdaq: BIIB), and Celgene (Nasdaq: CELG) fell by as much as 25%. Opportunities for both traders and buy-and-hold investors abound, as the stocks re-establish price support. Yet my favorite stock in this group is the one that has fallen the furthest.  Gilead Sciences (Nadsaq: GILD) is a tremendously undervalued… Read More

If you’ve been paying attention to the biotech and pharmaceutical space over the past few months (like my colleague David Sterman surely has), you know that these stocks have been hammered amid a sector rotation into late-cycle stocks.  #-ad_banner-#Big, profitable companies like Amgen (Nasdaq: AMGN), Biogen Idec (Nasdaq: BIIB), and Celgene (Nasdaq: CELG) fell by as much as 25%. Opportunities for both traders and buy-and-hold investors abound, as the stocks re-establish price support. Yet my favorite stock in this group is the one that has fallen the furthest.  Gilead Sciences (Nadsaq: GILD) is a tremendously undervalued aggressive-growth biopharmaceutical stock. (As you might have guessed, David Sterman is also a fan.) Gilead makes and markets treatments for immune deficiencies and a host of other ailments. The company operates in North America, Europe and Asia Pacific.  Gilead is a leader in HIV and hepatitis C therapies. Its Sovaldi drug, which the FDA approved late last year, has proved effective in combination with other medicines in curing hepatitis C. Sovaldi is joined in Gilead’s portfolio by Stribild, a top-selling one-a-day HIV treatment, and the company’s newest HIV medicine, Tybost, which boosts the function of other HIV medicines, including Gilead’s… Read More

The stock market does not have to be complicated. There are some very basic investment components that work together to increase stock prices: profitability, low valuations, and bullish charts. Investors search far and wide for such stocks, scouring the Internet and following prominent investment gurus, hoping to discover unknown gems — but what if I told you that one such undervalued aggressive growth stock has been right under your nose — in your kitchen? Whirlpool Corp. (NYSE: WHR), the world’s largest home appliance manufacturer, has been increasing earnings at a pace that would make most… Read More

The stock market does not have to be complicated. There are some very basic investment components that work together to increase stock prices: profitability, low valuations, and bullish charts. Investors search far and wide for such stocks, scouring the Internet and following prominent investment gurus, hoping to discover unknown gems — but what if I told you that one such undervalued aggressive growth stock has been right under your nose — in your kitchen? Whirlpool Corp. (NYSE: WHR), the world’s largest home appliance manufacturer, has been increasing earnings at a pace that would make most companies blush. Net income more than doubled last year, to a record $827 million on revenue of $18.8 billion, propelled by global expansion, the U.S. housing recovery, cost-cutting efforts, and disciplined product pricing. Whirlpool makes all your standard large appliances — washers, dryers, refrigerators, freezers and dishwashers — as well as smaller kitchen appliances. Some of the many brands it produces include Whirlpool, Kenmore, Maytag and KitchenAid.  In 2012, the U.S. market accounted for 52% of Whirlpool’s sales. U.S. appliance sales are increasing in conjunction with rising housing starts and home prices, and increased home renovation activity. European sales are… Read More

The market seems to be in upheaval this year, yet the S&P is only down 1% year to date. So what’s going on? #-ad_banner-#Simply put, we’re seeing a rotation in the market — namely, from growth to value. In hindsight, this development was easy to predict. We’re in the latter stages of an economic cycle, which tends to be characterized by rising interest rates and inflation, combined with lower corporate profit margins. This spells bad news for momentum-based growth stocks, and we’ve seen the effects of that play out in the past couple weeks. In an effort to moderate investment… Read More

The market seems to be in upheaval this year, yet the S&P is only down 1% year to date. So what’s going on? #-ad_banner-#Simply put, we’re seeing a rotation in the market — namely, from growth to value. In hindsight, this development was easy to predict. We’re in the latter stages of an economic cycle, which tends to be characterized by rising interest rates and inflation, combined with lower corporate profit margins. This spells bad news for momentum-based growth stocks, and we’ve seen the effects of that play out in the past couple weeks. In an effort to moderate investment risk during cycles like this, investors tend to take a flight to safety, looking for stocks with value, represented by good cash positions, low debt, dividends, low price-earnings (P/E) ratios — and, of course, earnings growth. This raises the question: Where exactly should investors be looking right now for safe, value-based stocks? One of my favorite sectors right now is energy — specifically oilfield services. Oilfield service stocks are currently leading the pack in the energy space, spurred on by strong earnings growth and low valuations. Let’s take a look at three of my favorite leaders in this field… Baker… Read More