“When the going gets weird, the weird turn pro.” – Hunter S. Thompson I know I’ve used this quote before, but it so applicable to so many situations, especially now considering the lofty state of equity markets. Markets do seem to be in weird place. Pundits are almost split down the middle as to whether the current bull run has any more steam left. Some argue that valuations are stretched thin while others continue to pound the table, goading investors to pile in. I’m splitting the difference. The S&P 500 trades at 19.4 times expected earnings. We’ve seen it much richer… Read More

“When the going gets weird, the weird turn pro.” – Hunter S. Thompson I know I’ve used this quote before, but it so applicable to so many situations, especially now considering the lofty state of equity markets. Markets do seem to be in weird place. Pundits are almost split down the middle as to whether the current bull run has any more steam left. Some argue that valuations are stretched thin while others continue to pound the table, goading investors to pile in. I’m splitting the difference. The S&P 500 trades at 19.4 times expected earnings. We’ve seen it much richer in the past. However, there are some visible cracks showing. #-ad_banner-#Some sectors, such as energy and telecom services, are negative for the year. But despite news to the contrary, there are bargains in the market. Previously, I highlighted a consumer staples stock that stood out in another lackluster sector.  One of the most consistently successful value investing strategies is the venerable Dogs of the Dow. Created in 1972, the year I started kindergarten, the remarkable beauty of the Dogs as an investment strategy is its simplicity: Buy the ten highest dividend yielders in the Dow Jones Industrial Average (DJIA).  Here is… Read More

Earlier this year, I profiled one of the best stocks in the perennially un-sexy aftermarket auto parts sector. This stock is still an incredible buy for patient, conservative investors focused on the long haul. After delivering 9% (including dividends) since my recommendation, shares of Genuine Parts Co. (NYSE: GPC) now trade at an attractive 15% discount to their 52-week high. Despite the rise and sudden drop, my original investment thesis is still intact. As I pointed out in the previous article, the U.S. aftermarket auto parts space is still highly fragmented. While the big national players such as… Read More

Earlier this year, I profiled one of the best stocks in the perennially un-sexy aftermarket auto parts sector. This stock is still an incredible buy for patient, conservative investors focused on the long haul. After delivering 9% (including dividends) since my recommendation, shares of Genuine Parts Co. (NYSE: GPC) now trade at an attractive 15% discount to their 52-week high. Despite the rise and sudden drop, my original investment thesis is still intact. As I pointed out in the previous article, the U.S. aftermarket auto parts space is still highly fragmented. While the big national players such as GPC, O’Reilly (Nasdaq: ORLY), and AutoZone (NYSE: AZO) seem to have a gigantic presence, mom and pop operations are still relevant players on a market share basis. However, consolidating within that independent space is GPC’s growth strategy. Recently, the company closed on two acquisitions: Apache Hose and Belting Company and Monroe Motor Products. With these two smart buys, GPC was able to add another $125 million to its current annual revenue number of $15.28 billion. They also help solidify GPC’s automotive and industrial supply footprint. #-ad_banner-#The company also has its sights set overseas growth, as demonstrated by the completion of… Read More

Recently, I published a piece on an otherwise healthy market sector that has been left out of the current rally for no particular reason. In identifying this, I stumbled onto a great brand name that’s trading at a bargain. In addition to owning a high-quality stock, investors can also participate in the extended U.S. economic recovery as well as the larger theme of the growing middle class in emerging markets. The company is literally a household name: major appliance manufacturer Whirlpool (NYSE: WHR). While the stock is poised to, hopefully, finish the year in the black, the price… Read More

Recently, I published a piece on an otherwise healthy market sector that has been left out of the current rally for no particular reason. In identifying this, I stumbled onto a great brand name that’s trading at a bargain. In addition to owning a high-quality stock, investors can also participate in the extended U.S. economic recovery as well as the larger theme of the growing middle class in emerging markets. The company is literally a household name: major appliance manufacturer Whirlpool (NYSE: WHR). While the stock is poised to, hopefully, finish the year in the black, the price action has definitely been through the spin cycle, with shares underperforming the broader market. The main culprit is back-to-back quarterly earnings per share (EPS) disappointments.  The company delivered quarterly results that missed the consensus estimates by an average of 3.25% for the second and third quarters of 2017. The result was an 18.5% haircut from the stock’s 52 week high. #-ad_banner-#But despite the herd’s typical reaction, Whirlpool’s future is hardly bleak. Here’s why… It’s All About Foreign Markets Just 48% of Whirlpool’s revenue comes from the United States. This means more than half of the company’s sales come from… Read More

Adolescence can be rough. Everyone doesn’t get to party with the cool kids. But those who are most ignored sometimes wind up being the big winners after all. Stock markets often resemble high school in this way. Cliques of stocks are more popular than others from time to time. This is especially true during rallies. The sector beneficiaries of the current rally are the financials, energy, industrials, and materials. However, after enjoying healthy gains since the financial crisis of 2008, consumer staples stocks have turned in the second-worst performance this past year, coming in just behind utility stocks. Stocks of… Read More

Adolescence can be rough. Everyone doesn’t get to party with the cool kids. But those who are most ignored sometimes wind up being the big winners after all. Stock markets often resemble high school in this way. Cliques of stocks are more popular than others from time to time. This is especially true during rallies. The sector beneficiaries of the current rally are the financials, energy, industrials, and materials. However, after enjoying healthy gains since the financial crisis of 2008, consumer staples stocks have turned in the second-worst performance this past year, coming in just behind utility stocks. Stocks of consumer staples companies, such as food manufacturers, are often referred to as defensive stocks. If economic times are tough, staples companies should still perform well due to the necessary nature of their products. People have to eat. #-ad_banner-#However, what’s always struck me as odd is that people have to eat in good times as well as bad times. Nevertheless, consumer staples stocks are currently out of favor, creating opportunities for bargain hunters. One of my favorite stocks in the staples space is roll-up act B&G Foods (NYSE: BGS). Shares have been beaten up a bit this year. Read More

OK. I know I’ve been on a bit of a thematic rant about investing ahead of tax reform. I’ve also touched on the current administration’s national infrastructure spending aspirations. I think it’s worth staying on the tax reform path. However, it’s also time to look at the infrastructure theme again. I’ve found a way to follow both developments with one stock, AND get paid quite well in the process. Investment giant Blackstone Group (NYSE: BX) has always been one of my go-to stocks for growth and income. Historically, both have been outstanding. The stock has moved a stunning… Read More

OK. I know I’ve been on a bit of a thematic rant about investing ahead of tax reform. I’ve also touched on the current administration’s national infrastructure spending aspirations. I think it’s worth staying on the tax reform path. However, it’s also time to look at the infrastructure theme again. I’ve found a way to follow both developments with one stock, AND get paid quite well in the process. Investment giant Blackstone Group (NYSE: BX) has always been one of my go-to stocks for growth and income. Historically, both have been outstanding. The stock has moved a stunning 54.5% in the last 12 months. Throw in the dividend and investors collected a blockbuster 65%.  #-ad_banner-#After a run that strong, and what some pundits view as a toppy broader market, conventional wisdom might tell one to avoid owning this stock. I disagree.   With a consolidated market cap of $41.3 billion, Blackstone stands out as one of the world’s premiere investment managers focusing on what’s known as the alternative space (i.e. NOT purely stocks and bonds). The firm operates four business segments: private equity, real estate, hedge fund solutions, and credit. Helmed by founder Steve Schwartzman, the company is poised… Read More

Hockey legend Wayne Gretzky coined the phrase now co-opted by every money manager in the racket: “I skate to where the puck is going to be, not where it has been.” Now, the Trump administration’s proposed tax reform plan may just give them the opportunity to prove it. One sector in particular is poised to capitalize on the anticipated 43% reduction in federal taxes. After muddling through the post-financial crisis landscape, U.S. commercial banks are starting to show signs of life. The return to profitability will ultimately lead to renewed merger and acquisition (M&A) activity. This chart from the always… Read More

Hockey legend Wayne Gretzky coined the phrase now co-opted by every money manager in the racket: “I skate to where the puck is going to be, not where it has been.” Now, the Trump administration’s proposed tax reform plan may just give them the opportunity to prove it. One sector in particular is poised to capitalize on the anticipated 43% reduction in federal taxes. After muddling through the post-financial crisis landscape, U.S. commercial banks are starting to show signs of life. The return to profitability will ultimately lead to renewed merger and acquisition (M&A) activity. This chart from the always resourceful Saint Louis Fed paints a clear picture of the market. While the number of U.S. commercial banks has been shrinking over the past 30 years, the level of total assets held by commercial banks has ballooned. Eventually, that money will have to go somewhere. If current trends are any indication, much of it will end up going towards acquisitions.  One of the best ways for investors to position themselves for a bank merger bonanza is the John Hancock Financial Opportunities Fund (NYSE: BTO). Launched in 1994, the closed-end fund (CEF), originally named the John Hancock Bank and… Read More

When it comes to money, every now and then the U.S. government gets caught in the act of doing something terribly right. The creation of the Roth IRA in 1997 is a great example.  As the Trump administration rolls out its tax plan, the proposed rollback of the corporate tax rate from 35% to 20%, a major component of the plan, might also enter the tax-reform hall of fame. Sure, large multi-national companies  will benefit from the reduction, but these companies also have the luxury of tax benefits in many different countries. For example, in 2016 Microsoft (Nasdaq: MSFT) had… Read More

When it comes to money, every now and then the U.S. government gets caught in the act of doing something terribly right. The creation of the Roth IRA in 1997 is a great example.  As the Trump administration rolls out its tax plan, the proposed rollback of the corporate tax rate from 35% to 20%, a major component of the plan, might also enter the tax-reform hall of fame. Sure, large multi-national companies  will benefit from the reduction, but these companies also have the luxury of tax benefits in many different countries. For example, in 2016 Microsoft (Nasdaq: MSFT) had a domestic loss of $300 million and foreign income of $20.1 billion. The company’s net tax liability was $3.3 billion, or an effective rate of around 16.5%. Small- and micro-cap companies, on the other hand, do much of their business domestically. A 43% cut in the corporate tax rate would be a huge boon to these companies and their stocks alike. However, due to the sometimes esoteric nature of the space, one of the best ways to gain exposure is taking the fund route.  #-ad_banner-#One of the most experienced small-cap funds out there is the Royce Value Trust (NYSE: RVT),… Read More

By the end of the 20th century, General Electric (NYSE: GE) represented the epitome of bloated, mega-cap conglomerated largesse. Helmed by management hotshot Jack Welch, GE dabbled in everything from its traditional industrial manufacturing businesses, which included heavy capital goods like locomotives and jet engines, to household appliances and media property ownership (NBC). But its crown jewel was its finance arm, GE Capital, which was used to help customers finance the jet engines and the locomotives. But after the turn of the millennium, GE wasn’t so lucky. The bear market that began with the bursting of the tech bubble mauled… Read More

By the end of the 20th century, General Electric (NYSE: GE) represented the epitome of bloated, mega-cap conglomerated largesse. Helmed by management hotshot Jack Welch, GE dabbled in everything from its traditional industrial manufacturing businesses, which included heavy capital goods like locomotives and jet engines, to household appliances and media property ownership (NBC). But its crown jewel was its finance arm, GE Capital, which was used to help customers finance the jet engines and the locomotives. But after the turn of the millennium, GE wasn’t so lucky. The bear market that began with the bursting of the tech bubble mauled the company’s stock price, sending it down a full 56%. Prices recovered somewhat only to be hammered down by the 2008 Financial Crisis and resulting credit freeze, which threatened the very existence of the company. While the stock is up 195% from those 2009 market lows, it’s been a long road back and the price has more or less moved sideways for the last three years. But that may be about to change. Jeff Immelt, the CEO that guided the company through the dangers of 2008, recently retired, handing the reins over to John Flannery. Prior to his… Read More

Over the course of two decades in the professional investment business, I’ve stumbled onto stock ideas purely by accident maybe a couple dozen times. Sometimes I’m looking for one thing and find another. More than once, I’ve typed in the wrong symbol. That happened again recently. And after some digging, I decided that I had had to write about my find. There’s a better than decent chance that at some point, while growing up in the United States, your mom probably used Scott’s Liquid Gold furniture polish at least once. Here’s a television commercial from the… Read More

Over the course of two decades in the professional investment business, I’ve stumbled onto stock ideas purely by accident maybe a couple dozen times. Sometimes I’m looking for one thing and find another. More than once, I’ve typed in the wrong symbol. That happened again recently. And after some digging, I decided that I had had to write about my find. There’s a better than decent chance that at some point, while growing up in the United States, your mom probably used Scott’s Liquid Gold furniture polish at least once. Here’s a television commercial from the 1970s to jog your memory.  Think the brand is dead? Nope. Owned by some gigantic consumer products mega-cap like Procter and Gamble (NYSE: PG)? Nope. It’s still made in Denver, CO where it was invented at the turn of the 20th century. The company is still owned by the family that bought the original formula from inventor Lee Scott for $350 (not a misprint) in 1951.  #-ad_banner-#Even more remarkable, the company, Scott’s Liquid Gold, Inc. is publicly traded (OTC: SLGD). It’s a tiny company with a consolidated market cap of barely $25 million. Typically, I don’t dive into the extremely… Read More

As a lifelong resident of a hurricane-prone area, and having sat through more than a handful of them, I feel a little guilty promoting what some people refer to as “disaster capitalism”. At the same time, one of the greatest investors of all time, Baron Rothschild, proffered that one should “buy when you hear the cannon, sell when you hear violins.” I’ve referenced that quote multiple times in my writing and will continue to do so because it’s some of the best investing advice ever. After unloading an estimated 33 trillion gallons of water on the United States, mostly on… Read More

As a lifelong resident of a hurricane-prone area, and having sat through more than a handful of them, I feel a little guilty promoting what some people refer to as “disaster capitalism”. At the same time, one of the greatest investors of all time, Baron Rothschild, proffered that one should “buy when you hear the cannon, sell when you hear violins.” I’ve referenced that quote multiple times in my writing and will continue to do so because it’s some of the best investing advice ever. After unloading an estimated 33 trillion gallons of water on the United States, mostly on coastal Texas, Hurricane Harvey could be responsible for damage exceeding $180 billion. In the Houston area alone, it’s estimated that nearly 40,000 homes have been completely destroyed. Even more remarkable was the projected number of cars completely ruined by the floodwaters. Again, in just the Houston area, which is heavily auto-dependent, the total could be over 1 million vehicles. The number is much higher if the entire affected area is included. According to auto researcher Kelley Blue Book, the average transaction price for a new car in the United States is currently $33,560. That means that replacing the lost cars… Read More