The world can be a scary place to invest these days. Greece can’t pay its debts, Russia is a mess, China’s stock market is quickly falling back to earth after a meteoric run-up and Brazil is still dealing with the fallout of a massive corruption scandal involving dozens of politicians and its state-controlled oil company Petrobas S.A. (NYSE: PBR). The global challenges are leading many investors to seek out the relative safety and  stability that large North American companies offer, especially those that have a primarily domestic focus.  Here are three companies that operate almost entirely in the United States… Read More

The world can be a scary place to invest these days. Greece can’t pay its debts, Russia is a mess, China’s stock market is quickly falling back to earth after a meteoric run-up and Brazil is still dealing with the fallout of a massive corruption scandal involving dozens of politicians and its state-controlled oil company Petrobas S.A. (NYSE: PBR). The global challenges are leading many investors to seek out the relative safety and  stability that large North American companies offer, especially those that have a primarily domestic focus.  Here are three companies that operate almost entirely in the United States that provide stability, yield and growth. The Hershey Co. (NYSE: HSY) is almost certainly familiar to nearly every U.S. consumer as a leading purveyor of chocolate and other snacks. The company has been in business since 1894 and does 82% of its business in the United States. Hershey is at the top of the U.S. confectionary market with 31% market share. Despite operating in a slow-growth market, Hershey is able to leverage its tremendous brand loyalty and pricing power into a compounded annual earnings growth rate of more than 7% per year over the past 10 years. In that time,… Read More

#-ad_banner-#It’s tough out there for a value investor. The market has shrugged off worries of a Greek bond default, and the major stock market indices remain near peak levels.  A clear sign of robust markets:  The S&P trades for more than 20 times trailing earnings. Luckily, the market aphorism, “It’s not a stock market, it’s a market of stocks” holds true. There are bargains out there waiting to be found, especially in one key sector. The uncertainty about interest rates has pushed the prices of real estate down, but one of the most consistently profitable real estate companies has fallen… Read More

#-ad_banner-#It’s tough out there for a value investor. The market has shrugged off worries of a Greek bond default, and the major stock market indices remain near peak levels.  A clear sign of robust markets:  The S&P trades for more than 20 times trailing earnings. Luckily, the market aphorism, “It’s not a stock market, it’s a market of stocks” holds true. There are bargains out there waiting to be found, especially in one key sector. The uncertainty about interest rates has pushed the prices of real estate down, but one of the most consistently profitable real estate companies has fallen too far, and a golden opportunity for long-term investors has emerged. A True Blue-Chip Company Ventas, Inc. (NYSE: VTR) is a large healthcare-focused real estate investment trust (REIT), and with a market value of $21 billion, it is one of the largest REITs in the healthcare industry. The company is extremely well diversified, owning a broad portfolio of senior housing facilities, medical office buildings and hospitals. This company’s funds from operations (FFO) have  grown 10% annually since 2004, and that has made shareholders rich along the way. Despite the announcement of a strong 8% increase in FFO… Read More

As cross-border trade expands, U.S.-based healthcare providers are increasingly finding customers around the globe. Source: Abbott Labs 2014 Annual Report In the United States, healthcare spending is a whopping 18% of GDP. On the other hand, in emerging economies healthcare makes up only 6% of GDP. A growing middle class in developing nations means that number is rising. Companies focusing overseas are going to grow faster than U.S.-focused counterparts. Here are three companies following the growth around the world: Abbott Laboratories (NYSE: ABT) Abbott is a global provider of branded pharmaceuticals and other healthcare… Read More

As cross-border trade expands, U.S.-based healthcare providers are increasingly finding customers around the globe. Source: Abbott Labs 2014 Annual Report In the United States, healthcare spending is a whopping 18% of GDP. On the other hand, in emerging economies healthcare makes up only 6% of GDP. A growing middle class in developing nations means that number is rising. Companies focusing overseas are going to grow faster than U.S.-focused counterparts. Here are three companies following the growth around the world: Abbott Laboratories (NYSE: ABT) Abbott is a global provider of branded pharmaceuticals and other healthcare products. It operates in more than 100 countries and generates close to 70% of its revenue outside the United States. Asia represents Abbott’s fastest-growing region. #-ad_banner-#The Asia-Pacific region’s healthcare spending is expected to grow at a rate of 7.1 percent from 2013 to 2017, according to The Economist. China is one of the firm’s major markets, where Abbott Labs is excelling  despite a complex regulatory environment. The firm has grown sales in the country 24% per year since 2012, and China is now the company’s second-largest market behind the United States. Its third-largest market is India. Sales in the country… Read More

Exchange-traded funds (ETFs) are exploding in popularity with retail and institutional investors alike. Financial services firm Price Waterhouse Coopers expects the ETF industry to at least double to $5 trillion in assets under management by 2020. This will mean big profits for two asset management companies who are leaders in the industry. Exchange-traded funds are mostly commodity products. There are dozens of companies that offer an S&P 500 ETF, for example, and all hold the exact same companies. The best way an asset manager can differentiate itself among competitors is to become the lowest cost provider,… Read More

Exchange-traded funds (ETFs) are exploding in popularity with retail and institutional investors alike. Financial services firm Price Waterhouse Coopers expects the ETF industry to at least double to $5 trillion in assets under management by 2020. This will mean big profits for two asset management companies who are leaders in the industry. Exchange-traded funds are mostly commodity products. There are dozens of companies that offer an S&P 500 ETF, for example, and all hold the exact same companies. The best way an asset manager can differentiate itself among competitors is to become the lowest cost provider, which means being the biggest. ​BlackRock, Inc. (NYSE: BLK) is a global asset management business and the world’s largest provider of ETFs. It has more than $1 trillion under management, spread across its many iShares funds. Blackrock is  growing assets under management in the iShares business at a compounded annual growth rate of 16% over the past five years. This rapid growth combined with a scalable business and low fixed costs, allows Blackrock to keep costs to customers low, which attracts more customers and assets. iShares is only one quarter of Blackrock’s total business, but the evidence of the business’… Read More

As I highlighted in a previous article, bad management teams can destroy shareholder wealth. Yet exemplary management teams can compound wealth for decades and make shareholders rich along the way. The 2008-2009 crisis showed us that in no other industry does management skill and discipline matter more than the financial sector. When financial companies make the news, it’s usually for the wrong reasons. I’ve found a pair of great companies that have stayed under the radar and are great stocks to own for decades.  The Travelers Companies, Inc. (NYSE: TRV) is a property and casualty insurer primarily focused on a… Read More

As I highlighted in a previous article, bad management teams can destroy shareholder wealth. Yet exemplary management teams can compound wealth for decades and make shareholders rich along the way. The 2008-2009 crisis showed us that in no other industry does management skill and discipline matter more than the financial sector. When financial companies make the news, it’s usually for the wrong reasons. I’ve found a pair of great companies that have stayed under the radar and are great stocks to own for decades.  The Travelers Companies, Inc. (NYSE: TRV) is a property and casualty insurer primarily focused on a commercial client base. Nonetheless, a third of its business is home and auto insurance for individuals. What makes Travelers special is its tremendous performance in the most important metric for evaluating insurance companies, the combined ratio. The combined ratio answers whether the company is adequately compensated for the risk it is taking and whether the company is operating efficiently. The ratio measures how much income generated from insurance premiums goes to pay operating expenses and customer claims. A combined ratio under 100% indicates an underwriting profit, and a ratio over 100% indicates an underwriting loss. Insurance companies can still earn… Read More

It’s often helpful to glance at the key moves made by hedge fund managers when in search of new investment ideas. And right now, many of these savvy investors are buying shares of a behind-the-scenes industrial play. The company in question: Macquarie Infrastructure Co. LLC (NYSE: MIC), which owns  a collection of assets primarily in the materials and energy sector. #-ad_banner-#Macquarie Infrastructure’s biggest asset is International-Matex Tank Terminals (IMTT), a company that owns and manages bulk liquid storage facilities on ports and railways. IMTT handles products like petroleum; renewable fuels; vegetable and animal oils; and other chemicals essential to everyday… Read More

It’s often helpful to glance at the key moves made by hedge fund managers when in search of new investment ideas. And right now, many of these savvy investors are buying shares of a behind-the-scenes industrial play. The company in question: Macquarie Infrastructure Co. LLC (NYSE: MIC), which owns  a collection of assets primarily in the materials and energy sector. #-ad_banner-#Macquarie Infrastructure’s biggest asset is International-Matex Tank Terminals (IMTT), a company that owns and manages bulk liquid storage facilities on ports and railways. IMTT handles products like petroleum; renewable fuels; vegetable and animal oils; and other chemicals essential to everyday life. While bulk liquid storage doesn’t sound like a high growth industry, the company has managed to grow revenue 10% and operating earnings (EBITDA) 11% annually over the last two years. In mid 2014, Macquarie acquired the other 50% of the business it didn’t already own, making it the crown jewel of Macquarie’s portfolio. The firm’s other assets include Hawaii Gas, which distributes natural and synthetic gas on the islands of Hawaii,  and Contracted Power and Energy, which owns controlling interests in five solar power generating facilities, a recently purchased gas-powered energy facility and two wind power generating… Read More

It’s an old investing axiom that that many of the companies with the highest growth potential are private and thus out of reach for investors of the public markets. Venture Capital (VC) firms are the ones making investments in early stage growth companies, but it usually takes big bucks to get in on the action. GSV Capital Corp. (Nasdaq: GSVC) is a publicly traded VC that allows regular investors to invest in hyper-growth companies. Better yet, the firm’s stock trades at a discount and has several potential catalysts that could send shares higher. In early-stage investing, there are going to… Read More

It’s an old investing axiom that that many of the companies with the highest growth potential are private and thus out of reach for investors of the public markets. Venture Capital (VC) firms are the ones making investments in early stage growth companies, but it usually takes big bucks to get in on the action. GSV Capital Corp. (Nasdaq: GSVC) is a publicly traded VC that allows regular investors to invest in hyper-growth companies. Better yet, the firm’s stock trades at a discount and has several potential catalysts that could send shares higher. In early-stage investing, there are going to be hits and misses, that’s just the nature of the beast. However, GSV has shown it has a knack for picking winners. It invested in Facebook, Inc. (Nasdaq: FB) and Twitter, Inc. (NYSE: TWTR) prior to their initial public offerings (IPOs). This is a company that’s done very well for investors, steadily growing its net asset value per share over the last three years. Despite the company steadily growing assets per share, the stock price hasn’t followed suit. Despite trading for a slight premium to net asset value during the first few years of its existence, it now… Read More

Great opportunities in the stock market don’t come around too often and in those rare instance, they usually don’t last long. For example,  I highlighted three appealing real estate investment trusts a few months ago. My favorite industry pick at the time, Omega Healthcare Investors, Inc. (NYSE: OHI), has become an even more appealing value since then.   OHI is a pure-play REIT that focuses on skilled nursing facilities. A number of unique events in the last quarter have made investors uncertain about the stock and that uncertainty is contributing to the sell-off. First, Omega Healthcare… Read More

Great opportunities in the stock market don’t come around too often and in those rare instance, they usually don’t last long. For example,  I highlighted three appealing real estate investment trusts a few months ago. My favorite industry pick at the time, Omega Healthcare Investors, Inc. (NYSE: OHI), has become an even more appealing value since then.   OHI is a pure-play REIT that focuses on skilled nursing facilities. A number of unique events in the last quarter have made investors uncertain about the stock and that uncertainty is contributing to the sell-off. First, Omega Healthcare recently closed on the acquisition of Aviv REIT, announced last year. As partial payment, the REIT issued 9.5 million shares of common stock in February, and investors generally don’t like being diluted. However, with the purchase of Aviv, Omega Healthcare becomes the dominant player in skilled nursing facilities (SNF). Source: Company Presentation Omega Healthcare also used the proceeds of an equity offering to pay down debt and now has ample capital and credit to continue to add to its portfolio. The company notes that 87% of the $100 billion skilled nursing facility market is still privately-owned. As… Read More

Value investing can be tough. It means thinking in a contrarian manner, while the investing herd stampedes in another direction. Value opportunities usually occur when something is going wrong for a company. Recognizing a headwind that is temporary or fixable, especially when it affects an otherwise healthy company, is what value investors dream of. Aflac, Inc. (NYSE: AFL) is a specialty insurer that offers disability and supplemental medical insurance products in the United States and Japan. Although famous for a talking duck mascot, this is a spectacularly run company. Aflac has raised its dividend for 33 consecutive years, making it… Read More

Value investing can be tough. It means thinking in a contrarian manner, while the investing herd stampedes in another direction. Value opportunities usually occur when something is going wrong for a company. Recognizing a headwind that is temporary or fixable, especially when it affects an otherwise healthy company, is what value investors dream of. Aflac, Inc. (NYSE: AFL) is a specialty insurer that offers disability and supplemental medical insurance products in the United States and Japan. Although famous for a talking duck mascot, this is a spectacularly run company. Aflac has raised its dividend for 33 consecutive years, making it a member of the “Dividend Aristocrats.” In each of the past 10 years, even during the financial crisis of 2008, it has achieved a 15% or better return on equity. This company controls a very specific niche in the market and is the undisputed leader in supplemental insurance products. Despite the fact that it’s headquartered here in the United States, most of Aflac’s business comes from Japan. In 2014, Japanese operations accounted for more than 70% of Aflac’s revenue.  In Japan, the company is performing well, consistently adding policies and growing premium income year in and… Read More

What are the characteristics of good business leaders? Honesty, financial responsibility and a focus on rewarding shareholders are surely key attributes. In my mind, management acumen and integrity is probably the most overlooked  aspect that underpins a company’s success. Here’s a closer look at how bad management can sour your investment.    Freeport-McMoRan, Inc. (NYSE: FCX) is a $24 billion (in market value) diversified commodities producer. It owns copper and gold mines along with oil and gas properties. #-ad_banner-#The slump in both metals and oil prices has been a double whammy for this company, but commodity prices will fluctuate through… Read More

What are the characteristics of good business leaders? Honesty, financial responsibility and a focus on rewarding shareholders are surely key attributes. In my mind, management acumen and integrity is probably the most overlooked  aspect that underpins a company’s success. Here’s a closer look at how bad management can sour your investment.    Freeport-McMoRan, Inc. (NYSE: FCX) is a $24 billion (in market value) diversified commodities producer. It owns copper and gold mines along with oil and gas properties. #-ad_banner-#The slump in both metals and oil prices has been a double whammy for this company, but commodity prices will fluctuate through cycles. The key is how Freeport-McMoRan handled the slump, which has negatively impacted investors’ returns. In the first quarter of 2015, the company announced a huge write-down in the value of its oil and gas assets and announced it was considering selling or spinning parts of that division off to “unlock shareholder value.” The truth: the company’s foray into oil and gas was a disaster from the start. A decision to acquire McMoRan Exploration, a former subsidiary, was an unwise move. Even though crude oil prices were high in 2012, McMoRan Exploration was in trouble and running out of cash. Read More