Is it fair to give Ben Bernanke (and his predecessor Janet Yellen) much of the credit for the current bull market? After all, many have come to believe that ultra-low interest rates, coupled with aggressive stimulus in the form of bond buying, has lit a strong and durable flame under stocks. These same folks also fret about the market’s eventual response when the Fed finally starts raising rates, perhaps in the middle of 2015. To be sure, the Fed’s actions haven’t hurt. The era of easy money has helped the current bull to become the fourth-longest since 1929. Longest Bull… Read More

Is it fair to give Ben Bernanke (and his predecessor Janet Yellen) much of the credit for the current bull market? After all, many have come to believe that ultra-low interest rates, coupled with aggressive stimulus in the form of bond buying, has lit a strong and durable flame under stocks. These same folks also fret about the market’s eventual response when the Fed finally starts raising rates, perhaps in the middle of 2015. To be sure, the Fed’s actions haven’t hurt. The era of easy money has helped the current bull to become the fourth-longest since 1929. Longest Bull Markets Start End # Of Days 12/04/1987 03/24/2000 4,494 06/13/1949 08/02/1956 2,607 10/03/1974 11/28/1980 2,248 03/09/2009 Present 2,062 07/23/2002 10/09/2007 1,904 08/12/1982 `08/25/1987 1,839 Source: Bespoke Investments Yet the Fed fixation obscures another key driver of the ongoing bull market: Corporate profits. They’ve been rising at a solid pace since 2009, for some fairly direct reasons, including: — Steady top-line growth, which, of course, is the key factor behind profit growth. — Automation enabling companies to produce more with fewer workers. — Economic insecurity, which has given employers the upper hand in salary discussions. Read More

In a perfectly efficient market, companies that deliver positive quarterly results and outlooks for future quarters will rally higher, and companies that deliver subpar results fall in value. But earnings season can be overwhelming, as thousands of companies hold conference calls in a multi-week span, that most investors need additional time to process what they have just seen and heard. #-ad_banner-#That spells opportunity for fast-moving investors. If you can spot good companies, with solid operating momentum, before the crowd takes notice, then you can be positioned for solid upside.  Here are three stocks that delivered a “beat and raise” quarter… Read More

In a perfectly efficient market, companies that deliver positive quarterly results and outlooks for future quarters will rally higher, and companies that deliver subpar results fall in value. But earnings season can be overwhelming, as thousands of companies hold conference calls in a multi-week span, that most investors need additional time to process what they have just seen and heard. #-ad_banner-#That spells opportunity for fast-moving investors. If you can spot good companies, with solid operating momentum, before the crowd takes notice, then you can be positioned for solid upside.  Here are three stocks that delivered a “beat and raise” quarter — meaning they exceeded Q3 results and also issued a bullish forward view — that have yet to see share prices rally higher. TRI Pointe Homes, Inc. (NYSE: TPH) It’s an old business maxim that the best time to launch a new business is when its industry is in turmoil. That creates an opportunity to dislocate the entrenched market share leaders, at a time when those leaders are retrenching. That explains why Starwood Capital’s Barry Sternlicht, known mostly for building upscale hotels, decided to enter the housing market in 2009, through the creation of Tri Point Homes. But Sternlicht… Read More

It’s always wise to have spare funds whenever earnings season rolls around. Inevitably, a handful of companies will deliver disappointing quarterly results, or a dim near-term outlook, leading investors to dump the stock. On some occasions, the selling is massively overdone, and if you are willing to be patient and let the bar reset for a quarter or two, then some of these stocks can post an impressive snapback rally — once the forward view has begun to strengthen. With that in mind, I took a look at all the stocks in the S&P 400, 500 and 600 that have… Read More

It’s always wise to have spare funds whenever earnings season rolls around. Inevitably, a handful of companies will deliver disappointing quarterly results, or a dim near-term outlook, leading investors to dump the stock. On some occasions, the selling is massively overdone, and if you are willing to be patient and let the bar reset for a quarter or two, then some of these stocks can post an impressive snapback rally — once the forward view has begun to strengthen. With that in mind, I took a look at all the stocks in the S&P 400, 500 and 600 that have slid at least 15% over the past month. Most look like dead money, but a few now hold clear appeal, especially since they have catalysts in place for a better 2015. Pain In The Oil Patch Of course the energy sector has been the biggest loser this earnings season. Until recently, oil appeared to stabilize in the $80 a barrel area, though we’ve now breached that level and a move toward $70 may be the end result. As I’ve noted on several recent occasions, a wide range of oil-related companies would still fare well, even at $70 oil, but as… Read More

Roughly a month ago, meteorologists began warning that the Eastern United States was headed for another brutally cold winter. It was the kind of story that many saw as “click-bait,” enticing people to watch online videos before getting a good weather scare. #-ad_banner-#Where I live, in New York’s Hudson Valley, temperatures were quite balmy as I kept hearing about the coming “Polar Vortex.” I made a mental note to check back in on the topic in early November, when we would have a much clearer read on the issue. Well, the facts are in and the pundits were right, it’s… Read More

Roughly a month ago, meteorologists began warning that the Eastern United States was headed for another brutally cold winter. It was the kind of story that many saw as “click-bait,” enticing people to watch online videos before getting a good weather scare. #-ad_banner-#Where I live, in New York’s Hudson Valley, temperatures were quite balmy as I kept hearing about the coming “Polar Vortex.” I made a mental note to check back in on the topic in early November, when we would have a much clearer read on the issue. Well, the facts are in and the pundits were right, it’s going to be another bleak winter. And last winter’s natural gas spike appears set for an encore. The Siberian Connection Roughly a year ago, I noted an uncanny correlation between the amount of autumnal snow pack in Siberia and winter temperatures in the Eastern United States. As I wrote then, nine of the 10 coldest winters in the eastern portion of the country were the result of this weather anomaly. Last winter’s subsequent deep freeze makes it 10 for 11. Sadly, the just-released numbers portend a coming winter that will again be quite frigid. For a bit… Read More

The Brown family in Louisville, Kentucky had plenty to celebrate in 1933. The repeal of prohibition meant that they could once again sell the family’s well-regarded whiskey, continuing the tradition started by family patriarch George Garvin Brown right after the Civil War. Brown’s Old Forester Kentucky Straight Bourbon Whisky (now known as Woodford’s Reserve) was just the first of many liquor brands to eventually fall into the stable run by Brown-Forman Corp. (NYSE: BF-A). #-ad_banner-#Though demand for Brown-Forman’s spirits have remained steady for decades, the company is now riding one of the hottest trends in the spirits industry: Brown liquor. Read More

The Brown family in Louisville, Kentucky had plenty to celebrate in 1933. The repeal of prohibition meant that they could once again sell the family’s well-regarded whiskey, continuing the tradition started by family patriarch George Garvin Brown right after the Civil War. Brown’s Old Forester Kentucky Straight Bourbon Whisky (now known as Woodford’s Reserve) was just the first of many liquor brands to eventually fall into the stable run by Brown-Forman Corp. (NYSE: BF-A). #-ad_banner-#Though demand for Brown-Forman’s spirits have remained steady for decades, the company is now riding one of the hottest trends in the spirits industry: Brown liquor. Brands such as Jack Daniels, Southern Comfort and others are growing in popularity across the demographic spectrum. What was once the drink of choice among older men is now finding appeal among women and millennials and is also increasingly popular in a wide range of foreign markets. According to the company, sales of premium spirits are growing at a 14% annual pace in emerging markets — twice the rate seen in the United States and Europe. The broadening popularity helps explain why shares have risen nearly 300% since 2009, handily eclipsing the S&P 500. Yet careful readers of our Top… Read More

Investors deploy a lot of strategies to find winning stocks: Some run investment screens based on various financial metrics, attend industry conferences to find well-positioned business models or simply focus on the top ideas from sources they know and trust. #-ad_banner-#For many loyal StreetAuthority readers, Amy Calistri is a very trusted stock source. For years, she’s shown an uncanny knack for finding stocks with robust dividend yields. Even more impressive: almost all of her picks seem to rise in value (often robustly) — it’s hard to find examples that lose value. She’s one of our most popular newsletter writers —… Read More

Investors deploy a lot of strategies to find winning stocks: Some run investment screens based on various financial metrics, attend industry conferences to find well-positioned business models or simply focus on the top ideas from sources they know and trust. #-ad_banner-#For many loyal StreetAuthority readers, Amy Calistri is a very trusted stock source. For years, she’s shown an uncanny knack for finding stocks with robust dividend yields. Even more impressive: almost all of her picks seem to rise in value (often robustly) — it’s hard to find examples that lose value. She’s one of our most popular newsletter writers — and for good reason. From time to time, I like to peruse Amy’s stock portfolio for her Daily Paycheck newsletter. In addition to her regular selection of buy-rated stocks, you’ll also find another category of dividend-paying stocks, what Amy calls “Fast Dividend Growers.” These stocks don’t offer the typical high yields that Amy is often known for, but instead appear poised to aggressively expand dividend payouts. One such stock just delivered Q3 results and represents everything you should look for in a dividend growth stock. Yet Another Great Refiner A month ago, I wrote about how oil refiners represent safety… Read More

As any CEO will tell you, working toward an initial public offering is an arduous process. Lawyers need to file reams of paperwork, bankers need to determine a suitable valuation and trading desks must line up demand for shares. Yet for some companies, the tough days don’t end there. After the IPO takes place, weak market action or simply a fickle base of initial shareholders can turn a potentially promising new stock into a dud. Every year, more than a few IPOs end up trading at levels lower than the offering price. #-ad_banner-#That’s why as every year winds down, I look… Read More

As any CEO will tell you, working toward an initial public offering is an arduous process. Lawyers need to file reams of paperwork, bankers need to determine a suitable valuation and trading desks must line up demand for shares. Yet for some companies, the tough days don’t end there. After the IPO takes place, weak market action or simply a fickle base of initial shareholders can turn a potentially promising new stock into a dud. Every year, more than a few IPOs end up trading at levels lower than the offering price. #-ad_banner-#That’s why as every year winds down, I look at the crop of IPOs, seeing which young companies have already been placed in the bargain bin. To be sure, some stocks deserve to be unloved. They represent companies with a dim future and the IPO was simply a way for its former backers to dump shares on someone else’s hands. But there are also some diamonds in the rough that deserve a second look. Here are three that I am focusing for a rebound in their sophomore years. MediWound Ltd (Nasdaq: MDWD) A number of biotech IPOs traded down this year as investors grew to fear that they… Read More

Heading into earnings season, investors were bracing for a troubling round of quarterly reports in the energy sector. A sharp drop in crude oil prices in the past few months led to concerns that companies would report dismal outlooks for the quarters ahead. Yet the bad news never arrived. Major oil companies, such as Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX), delivered upside surprises, and oil services firms, like Schlumberger Ltd (NYSE: SLB), also said that business conditions are holding up. Still, a great deal of damage has been done in this sector. Read More

Heading into earnings season, investors were bracing for a troubling round of quarterly reports in the energy sector. A sharp drop in crude oil prices in the past few months led to concerns that companies would report dismal outlooks for the quarters ahead. Yet the bad news never arrived. Major oil companies, such as Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX), delivered upside surprises, and oil services firms, like Schlumberger Ltd (NYSE: SLB), also said that business conditions are holding up. Still, a great deal of damage has been done in this sector. Outside of those aforementioned blue chips, many smaller energy-related stocks have fallen far from their 52-week high. One stock that I’ve had my eye on now appears set to deliver solid upside, has a game plan to protect against further downside and offers an impressive 7.2% dividend yield. It’s unloved now, but could be one of the best energy sector rebound plays of 2015. I’m talking about Noble Corp. (NYSE: NE). Noble owns and leases massive drilling rigs, with a focus on both deepwater and shallow water offshore regions. The company spun off roughly half of its fleet,… Read More

Most U.S. investors have never heard of China Minsheng Bank Corp. Ltd or GigaMedia Ltd. (Nasdaq: GIGM). But both companies ended up in deep trouble for using a risky corporate structure. It was a structure used by Enron back in the 1990’s, and ultimately led to the loss of billions in investors’ funds. And the hottest initial public offering of 2014, Alibaba Group Holding Ltd (Nasdaq: BABA) is using the same trick. A closer look at the issue explains why you should think twice about buying shares of Alibaba. If you already own shares, then you need to know about… Read More

Most U.S. investors have never heard of China Minsheng Bank Corp. Ltd or GigaMedia Ltd. (Nasdaq: GIGM). But both companies ended up in deep trouble for using a risky corporate structure. It was a structure used by Enron back in the 1990’s, and ultimately led to the loss of billions in investors’ funds. And the hottest initial public offering of 2014, Alibaba Group Holding Ltd (Nasdaq: BABA) is using the same trick. A closer look at the issue explains why you should think twice about buying shares of Alibaba. If you already own shares, then you need to know about this key risk. Accounting Obfuscation To help shield the true nature of its balance sheet, Enron’s financial masterminds used an unusual contract known as a variable interest structure, or VIE. Using a VIE, a company can disconnect the ownership of its assets from the claims of shareholders. In effect, key assets are placed into separate corporations, which are wholly-owned by the company’s management. Ancillary contracts are then typically established that pledge equity, assign profits and establish consulting agreements. #-ad_banner-#In the United States, embarrassed financial regulators abolished the use of a VIE after the dot-com implosion. Rules now clearly state… Read More

Many investors spend too much time during earnings season focusing on gross profit margins. They figure that a drop in these margins means a company is losing pricing power, or they worry that the cost of goods sold is rising too fast. Yet there are often good reasons for gross margins to be flat-to-down compared to prior periods. For example, in many competitive industries, flexibility on price is a key to growing the customer base. #-ad_banner-#The best-run companies know that even if each new contract doesn’t deliver the gross margins seen in in the past, they can still flow profits… Read More

Many investors spend too much time during earnings season focusing on gross profit margins. They figure that a drop in these margins means a company is losing pricing power, or they worry that the cost of goods sold is rising too fast. Yet there are often good reasons for gross margins to be flat-to-down compared to prior periods. For example, in many competitive industries, flexibility on price is a key to growing the customer base. #-ad_banner-#The best-run companies know that even if each new contract doesn’t deliver the gross margins seen in in the past, they can still flow profits to the bottom line. That’s because fixed overhead expenses are already in place and those new incremental revenues cost relatively little to service. To see what kind of companies have a history of operating leverage, I screened for companies that have boosted earnings per share at a much faster pace on average over the past three years than sales growth. And I eliminated any companies that have not boosted sales at least 10% annually in recent years. It’s no surprise that hundreds of companies make the cut, especially since corporate America has been continually streamlining since the Great Recession of… Read More