Many years ago, in the days before GPS, I had a healthy fear of getting lost. Before going anywhere unfamiliar, I’d get explicit directions.  Today, there’s absolutely no excuse for such a fear. It’s a lot harder to get lost today than it was 25 years ago. As a result, the fortunes of companies such as Garmin (Nasdaq: GRMN) have risen considerably since the dawn of the 21st century. #-ad_banner-#From 2005 to 2008, GRMN seemed to go in only one direction: up. However, with the onset of the financial crisis, a sluggish economy, and increasing competition,… Read More

Many years ago, in the days before GPS, I had a healthy fear of getting lost. Before going anywhere unfamiliar, I’d get explicit directions.  Today, there’s absolutely no excuse for such a fear. It’s a lot harder to get lost today than it was 25 years ago. As a result, the fortunes of companies such as Garmin (Nasdaq: GRMN) have risen considerably since the dawn of the 21st century. #-ad_banner-#From 2005 to 2008, GRMN seemed to go in only one direction: up. However, with the onset of the financial crisis, a sluggish economy, and increasing competition, has Garmin lost its way? Critics might say so, but the company is far from lost. New Directions Garmin has been too reliant on its automotive segment, which accounted for $919 million in sales in the fiscal third quarter, 55% of the company’s total. While nearly a billion dollars in sales is nothing to sneeze at, that total was down 13% from the same quarter the previous year. There were some bright points, such as a multi-year agreement with Mercedes-Benz to be an OEM (original equipment manufacturer) for navigation equipment.  In contrast to the automotive unit, Garmin’s marine and… Read More

As investors roll into 2014 with the wind at their backs, one thing is certain (or as certain as can be expected in the investment business): America is back.#-ad_banner-#​ Pundits and pessimists may grumble about lack of leadership in Washington, rising interest rates and a tepid economic recovery. But the nation has adapted in the aftermath of the financial crisis.  Corporate America got lean and mean, cleaned up its balance sheets and learned how to operate in the new and challenging environment. Households followed suit by shedding debt and consuming more responsibly (much to the disappointment of many… Read More

As investors roll into 2014 with the wind at their backs, one thing is certain (or as certain as can be expected in the investment business): America is back.#-ad_banner-#​ Pundits and pessimists may grumble about lack of leadership in Washington, rising interest rates and a tepid economic recovery. But the nation has adapted in the aftermath of the financial crisis.  Corporate America got lean and mean, cleaned up its balance sheets and learned how to operate in the new and challenging environment. Households followed suit by shedding debt and consuming more responsibly (much to the disappointment of many financial services companies). Doubters may think the market’s run-up since its bottom in 2009 is done. But as I wrote last month in the first part of this series, the American Renaissance has legs, and the run can continue.  Long-Term Transformation Johnson Controls (NYSE: JCI) is a textbook example of what I consider an American Renaissance stock. Best known for manufacturing automotive interior components and as the largest automotive battery operation in North America, Johnson Controls has morphed from an automotive industry-centric business into a multi-industrial global powerhouse. JCI spent most of last year on a certifiable tear:… Read More

“The greatness of America lies not in being more enlightened than any other nation, but rather in her ability to repair her faults.” – Alexis de Tocqueville#-ad_banner-#​ Old Alex, a noted French political thinker and writer, hit it on the screws with his observations of the American spirit during the early days of the Republic. Americans are good at recognizing (eventually) what’s broken, fixing it, and moving on. We’re also very good at figuring out how to profit from that change and evolution.  America has seen enormous change during the first decade of the 21st century. From the… Read More

“The greatness of America lies not in being more enlightened than any other nation, but rather in her ability to repair her faults.” – Alexis de Tocqueville#-ad_banner-#​ Old Alex, a noted French political thinker and writer, hit it on the screws with his observations of the American spirit during the early days of the Republic. Americans are good at recognizing (eventually) what’s broken, fixing it, and moving on. We’re also very good at figuring out how to profit from that change and evolution.  America has seen enormous change during the first decade of the 21st century. From the bursting of the tech bubble to the devastation of 9/11 to the financial crisis of 2008, the nation has struggled to get its economy and status as a global leader back on solid footing. But the seeds sown in that recovery process are beginning to bear fruit. It can only be described as an American Renaissance. Old line companies thought to be dead or dying are transforming themselves as leaders in new technology. All sorts of businesses are rushing to build infrastructure to support and transport America’s new found energy resources. Large manufacturers once caught up in the allure of… Read More

I’ve always loved telco stocks.#-ad_banner-# As investors, we’re told to train ourselves to look at stocks rationally and to remove emotion from the process. Warren Buffett warns that your stock won’t tell you it loves you when you come home at night. But dividend investing is also about finding great yield — and, with a tip of the hat to Willie Sutton, telco stocks are where the money is. Investors have almost always done well with domestic heavyweights AT&T (NYSE: T) and Verizon (NYSE: VZ). But I’ve always found more yield and value in international telco stocks. Vodafone Group (NYSE:… Read More

I’ve always loved telco stocks.#-ad_banner-# As investors, we’re told to train ourselves to look at stocks rationally and to remove emotion from the process. Warren Buffett warns that your stock won’t tell you it loves you when you come home at night. But dividend investing is also about finding great yield — and, with a tip of the hat to Willie Sutton, telco stocks are where the money is. Investors have almost always done well with domestic heavyweights AT&T (NYSE: T) and Verizon (NYSE: VZ). But I’ve always found more yield and value in international telco stocks. Vodafone Group (NYSE: VOD) has always been a good holding thanks to the British company’s investment in Verizon (a 41% stake before its recent sale) and its focus on emerging and frontier markets. Telefonica Brasil (NYSE: VIV) has the yield and value characteristics I look for in an international telco stock. The Sao Paulo-based telecom provides fixed-line and mobile communications, broadband Internet and pay TV services, among other offerings. A subsidiary of global telecom conglomerate Telefonica (NYSE: TEF), Telefonica Brasil serves nearly 28% of Brazil’s wireless market under the Vivo brand. Yet VIV is off by more than 30% from its 52-week high. Read More

Look over a typical dividend investor portfolio, and you’ll probably find the usual utility stock suspects: Southern Co. (NYSE: SO), American Electric Power (NYSE: AEP), Consolidated Edison (NYSE: ED). These are the biggest of the big domestic power generators. You can set your watch by their cash flow, which means you know what kind of dividends to expect. But they don’t grow much. Because of the highly regulated nature of the business, there’s little opportunity to expand their footprint or unlock special value for shareholders. When this happens, stock prices don’t move much. Just look at the price action of… Read More

Look over a typical dividend investor portfolio, and you’ll probably find the usual utility stock suspects: Southern Co. (NYSE: SO), American Electric Power (NYSE: AEP), Consolidated Edison (NYSE: ED). These are the biggest of the big domestic power generators. You can set your watch by their cash flow, which means you know what kind of dividends to expect. But they don’t grow much. Because of the highly regulated nature of the business, there’s little opportunity to expand their footprint or unlock special value for shareholders. When this happens, stock prices don’t move much. Just look at the price action of the Dow Jones Utility Average over the past half-decade: #-ad_banner-#A five-year average annual return of better than 13% is nothing to sneeze at. Investors have always gravitated toward utilities for their stable income and safety during turbulent markets. However, when equity markets are in full-tilt boogie, utility stocks typically underperform. What about the best of both worlds? Is there an investment that provides dependably high income with growth superior to that of the Dow Jones Utilities? I’ve found a utility stock that provides a great, safe income stream and has outperformed the Dow Jones Utilities by over 70%… Read More

One of my favorite scenes from the classic movie “Wall Street” is the boardroom scene when Bud Fox realizes that Gordon Gekko is going to dismantle Blue Star Airlines piece by piece. A portly, bespectacled investment banker glibly says: “No sweat. We sell the gates and pawn the planes off on the Mexicans. Do we have a deal or what?”  Sure, there are more action-packed parts of the flick. But to me, that particular scene helps explain what investing is all about: buying an asset and watching as the value is realized or unlocked. I’ve… Read More

One of my favorite scenes from the classic movie “Wall Street” is the boardroom scene when Bud Fox realizes that Gordon Gekko is going to dismantle Blue Star Airlines piece by piece. A portly, bespectacled investment banker glibly says: “No sweat. We sell the gates and pawn the planes off on the Mexicans. Do we have a deal or what?”  Sure, there are more action-packed parts of the flick. But to me, that particular scene helps explain what investing is all about: buying an asset and watching as the value is realized or unlocked. I’ve found a stock that fits that scenario that, coincidentally, is also in the airplane business: Fly Leasing (NYSE: FLY). Based in Dublin, Fly Leasing is in the commercial aircraft leasing business. Airlines are increasingly turning to operating leases to supply their fleets. In fact, over one third of the world’s airline fleet is leased.  Basically, the companies are renting the planes to avoid having a gigantic, swiftly depreciating asset sitting on its balance sheet. Firms like Fly assume the risk. Why? As that portly investment banker implied, you can always find someone who needs a plane. Read More

My dad is in his early 70s. I remember when he was in his 50s and would joke that when he retired, he would be glad to take the spare bunk in my youngest son’s room. Luckily, it hasn’t come to that.#-ad_banner-# Like many American seniors, he and my mother, also in her early 70s, are in excellent health and extremely active. They both still work full time. They’re not baby boomers. They’re part of the smaller pre-boomer generation that was born at the tail end of the Great Depression and during World War II. They have more in common… Read More

My dad is in his early 70s. I remember when he was in his 50s and would joke that when he retired, he would be glad to take the spare bunk in my youngest son’s room. Luckily, it hasn’t come to that.#-ad_banner-# Like many American seniors, he and my mother, also in her early 70s, are in excellent health and extremely active. They both still work full time. They’re not baby boomers. They’re part of the smaller pre-boomer generation that was born at the tail end of the Great Depression and during World War II. They have more in common with their parents than their younger boomer siblings or cousins. On the whole, they seem to be a little tougher, a little more independent and self-sufficient. Baby boomers, on the other hand, not so much. From the toy companies of the ’50s to the Big Pharma companies of the 1990s hawking erectile dysfunction cures, corporations and their shareholders have consistently profited in a big way by catering to the perceived immediate needs of the biggest bubble of the U.S. population — all 76 million of them, with another estimated 10,000 baby boomers turning 65 every day over the next 16… Read More

Here at StreetAuthority, we’re constantly on the lookout for stocks worthy of our Top 10 Stocks advisory — and a stock doesn’t attain that status by accident. One energy company in particular is a perennial Top 10 Stocks favorite. I profiled this company two years ago, calling it “the safest oil stock to buy.” The results since then haven’t been bad at all. Including dividends, investors who held shares of ConocoPhillips (NYSE: COP) enjoyed a compound annual growth rate of 31.8%, handily outperforming the S&P 500 Index’s rate of 27.3%. One might think that COP’s chart indicates its run is… Read More

Here at StreetAuthority, we’re constantly on the lookout for stocks worthy of our Top 10 Stocks advisory — and a stock doesn’t attain that status by accident. One energy company in particular is a perennial Top 10 Stocks favorite. I profiled this company two years ago, calling it “the safest oil stock to buy.” The results since then haven’t been bad at all. Including dividends, investors who held shares of ConocoPhillips (NYSE: COP) enjoyed a compound annual growth rate of 31.8%, handily outperforming the S&P 500 Index’s rate of 27.3%. One might think that COP’s chart indicates its run is done. Quite the contrary. Still The Safest Hands down, ConocoPhillips’ proven reserves are in some of the most accessible — both physically and politically — on the planet. At the end of last year, 78% of its proven reserves (oil or gas known to be in the ground in areas the company drills) were in North America or Western Europe. Now, “safe oil” is also expensive oil. More hospitable and developed countries mean political stability but more regulation. That’s the trade-off for uninterrupted flow. (There’s still money to be made on cheaper, less safe oil, such as… Read More

I grew up in and still live in the South. During the dog days of summer in July and August, when folks say, “It’s not the heat, it’s the humidity,” believe me, it’s the heat AND the humidity. Everything wilts. People move more slowly. Business slows down a little, too. There’s a real and noticeable effect. The fixed-income markets — represented by Treasurys, corporate and municipal bonds, and other income-oriented investments — experienced the dog days firsthand this summer as investors fretted over the prospect of the Federal Reserve scaling back its bond purchases, also known as tapering. Look what… Read More

I grew up in and still live in the South. During the dog days of summer in July and August, when folks say, “It’s not the heat, it’s the humidity,” believe me, it’s the heat AND the humidity. Everything wilts. People move more slowly. Business slows down a little, too. There’s a real and noticeable effect. The fixed-income markets — represented by Treasurys, corporate and municipal bonds, and other income-oriented investments — experienced the dog days firsthand this summer as investors fretted over the prospect of the Federal Reserve scaling back its bond purchases, also known as tapering. Look what happened to the 10-year Treasury: #-ad_banner-#Over the summer, yields nearly doubled, shooting from 1.6% to almost 3%. Naturally, this caused plenty of chaos in the bond market. However, chaos always brings opportunity. When it comes to adding a fixed-income component to an investor’s asset allocation and providing an above-average income stream, preferred stocks are one of the most useful tools available. Preferred stocks are typically classified as part of the issuing company’s debt structure. However, unlike bonds, preferreds are issued in face values smaller than $1,000 and are junior to bank loans and bonds. Preferreds are, however, senior… Read More

When I was 14, my grandmother gave me 200 shares of a small insurance company called Statesman Group, which eventually became American International Group (NYSE: AIG). The certificates were buried somewhere in my father’s law office, but dividend checks appeared in my mailbox every three months. (I remember they were usually for about $50. That was big money for a teenager in the early 1980s.) I always thought — and still do — that that was the neatest thing in the world: getting paid just to own stock. Historically, many equity investors have felt the same way — especially after… Read More

When I was 14, my grandmother gave me 200 shares of a small insurance company called Statesman Group, which eventually became American International Group (NYSE: AIG). The certificates were buried somewhere in my father’s law office, but dividend checks appeared in my mailbox every three months. (I remember they were usually for about $50. That was big money for a teenager in the early 1980s.) I always thought — and still do — that that was the neatest thing in the world: getting paid just to own stock. Historically, many equity investors have felt the same way — especially after the drubbing of the dot-com bubble burst, the 2001-’02 bear market and the most recent bear market resulting from the financial crisis and Great Recession. Companies that have consistently paid and increased their dividends tend to perform well in times of market uncertainty. The iShares Select Dividend ETF (NYSE: DVY) is proof positive of that sentiment. From trough to peak, investors who felt brave enough to buy have done quite well. Conventional wisdom would say maybe it’s time to take money off of the table. While playing defense and taking some profits is never a bad thing, investors… Read More