Growing up in the 1970’s, I learned a lot from my dad about stereo systems. He’s an engineer (and self-professed audiophile), and he spent hours explaining the virtues of various system designs. He also owned only one stereo brand: Harman Kardon. The company’s receivers and amplifiers delivered concert hall-quality sound. It was the “Mercedes-Benz of stereos,” as my dad liked to say. Today, investors know the company as Harman International Industries, Inc. (NYSE: HAR). Though it remains a technology leader in the audio field, housing other brands such as JBL and Inifinity, Harman has also emerged as one of the… Read More

Growing up in the 1970’s, I learned a lot from my dad about stereo systems. He’s an engineer (and self-professed audiophile), and he spent hours explaining the virtues of various system designs. He also owned only one stereo brand: Harman Kardon. The company’s receivers and amplifiers delivered concert hall-quality sound. It was the “Mercedes-Benz of stereos,” as my dad liked to say. Today, investors know the company as Harman International Industries, Inc. (NYSE: HAR). Though it remains a technology leader in the audio field, housing other brands such as JBL and Inifinity, Harman has also emerged as one of the leading providers of cutting-edge automotive dashboard systems, in a field known as “telematics.” #-ad_banner-#And a quick glance at the future direction of telematics — and Harman’s role in that eco-system — tells you that this company may soon play as large a technology role in your life as more well-known consumer electronics firms like Apple, Inc. (Nasdaq: AAPL). It’s just that role will be buried behind the dashboard. Meanwhile, as I’ll explain in a moment, shares of Harman have been placed in the bargain bin, after a steady sell-off. The Connected Car If you bought a car in the… Read More

The rapid meltdown in oil prices appears to have caught almost everyone off guard. When I looked at the crude oil market in early October, oil prices (for West Texas Intermediate Crude) had just moved below $90 a barrel. Quite suddenly, we’re approaching the $80 mark, and the shakeout may not an end until we hit the $70 mark. That’s a likely price-point when it will become unprofitable for many oil producers to continue drilling new wells. The price slump is leaving no industry unscathed. Shares of companies in oil services, exploration & production and the refiners are all… Read More

The rapid meltdown in oil prices appears to have caught almost everyone off guard. When I looked at the crude oil market in early October, oil prices (for West Texas Intermediate Crude) had just moved below $90 a barrel. Quite suddenly, we’re approaching the $80 mark, and the shakeout may not an end until we hit the $70 mark. That’s a likely price-point when it will become unprofitable for many oil producers to continue drilling new wells. The price slump is leaving no industry unscathed. Shares of companies in oil services, exploration & production and the refiners are all seeing their shares move lower. Yet it’s that last group that should make you do a double-take. Investors are dumping refinery stocks, even though the broader operating backdrop for these firms is actually improving. Investors now have a chance to profit — before the crowd catches on. The U.S. Output Boom To understand profit margin trends for oil refiners, you need to understand the impact of price differences in the United States — West Texas Intermediate is the benchmark — against the rest of the world, which uses the Brent Crude benchmark. European refineries, which ship gasoline and diesel to… Read More

What do Wonder Bread, Avis Rent-A-Car, Sheraton Hotels and Hartford Insurance Group have in common? They were all held under the corporate umbrella of telecom firm ITT in the 1970’s. ITT was one of many companies that became convinced that operating a wide range of companies in a vast number of industries is the quickest way to wealth-building. Yet ITT and others eventually buckled under the weight of their unwieldy operations and many large companies subsequently began to “de-conglomerate.” #-ad_banner-#Now, Carl Icahn is taking the de-conglomeration theme one step further: He’s imploring companies to spin off key divisions as a… Read More

What do Wonder Bread, Avis Rent-A-Car, Sheraton Hotels and Hartford Insurance Group have in common? They were all held under the corporate umbrella of telecom firm ITT in the 1970’s. ITT was one of many companies that became convinced that operating a wide range of companies in a vast number of industries is the quickest way to wealth-building. Yet ITT and others eventually buckled under the weight of their unwieldy operations and many large companies subsequently began to “de-conglomerate.” #-ad_banner-#Now, Carl Icahn is taking the de-conglomeration theme one step further: He’s imploring companies to spin off key divisions as a way to boost shares. He rattled eBay, Inc.’s (Nasdaq: EBAY) cage for nearly nine months, pushing the e-commerce company to spin-off its PayPal division. When eBay relented on September 30, announcing such a plan, its shares rose nearly 8%. Other activist investors are getting their case heard. Ralph Whitworth, who has publicly pushed Hewlett-Packard (NYSE: HPQ) to spin off its printer business, applauded the company when such a plan was announced earlier this month. “Shareholders will now be able to invest in the respective asset groups without the fear of cross-subsidies and inefficiencies that invariably plague large business conglomerates,” he… Read More

Now that the dust has settled on the widely heralded IPO for Alibaba (NYSE: BABA), investors have a clear sense of the company’s powerful market presence. Its $200 billion market value makes it the world’s fifth largest TMT (technology, media and telecom) company after Apple (NASDAQ: AAPL), Google (NASDAQ: GOOGL), Microsoft (NASDAQ: MSFT) and China Mobile (NYSE: CHL). Part of Alibaba’s appeal is its presence in the world’s fastest-growing entertainment market — China.  While Alibaba has been attracting all the attention, there’s another little-known Chinese company that is capitalizing on the increase in the country’s entertainment spending. With a market… Read More

Now that the dust has settled on the widely heralded IPO for Alibaba (NYSE: BABA), investors have a clear sense of the company’s powerful market presence. Its $200 billion market value makes it the world’s fifth largest TMT (technology, media and telecom) company after Apple (NASDAQ: AAPL), Google (NASDAQ: GOOGL), Microsoft (NASDAQ: MSFT) and China Mobile (NYSE: CHL). Part of Alibaba’s appeal is its presence in the world’s fastest-growing entertainment market — China.  While Alibaba has been attracting all the attention, there’s another little-known Chinese company that is capitalizing on the increase in the country’s entertainment spending. With a market cap around $350 million, Bona Film Group (NASDAQ: BONA) has become the value-oriented opportunity for the Chinese entertainment sector, namely its fledgling movie industry. Chinese Film Market Large and Growing China is the second largest film market in the world, behind North America. Box office revenue grew 27% in 2013 to around $3.6 billion, but that is still roughly one-third of the U.S. take. On any given day, more than a dozen new screens are added around the country, which has pushed the total number past 20,000. #-ad_banner-#​The Chinese government keeps a close regulatory hand on this industry,… Read More

Even for investors that have a high tolerance of risk for emerging markets, Russia has become too hot to handle. Under the capricious rule of Vladimir Putin, the country has gone out of its way to alienate global investments and diplomatic communities. What started with forays into Crimea and Ukraine has extended to a hostile economic environment for any companies interested in doing business in Moscow. Economic sanctions have been the West’s primary response, which has mostly been met with shrugs and statements of blustery nationalism from the Kremlin. #-ad_banner-#Yet with every passing day, Russia’s pariah status is delivering a… Read More

Even for investors that have a high tolerance of risk for emerging markets, Russia has become too hot to handle. Under the capricious rule of Vladimir Putin, the country has gone out of its way to alienate global investments and diplomatic communities. What started with forays into Crimea and Ukraine has extended to a hostile economic environment for any companies interested in doing business in Moscow. Economic sanctions have been the West’s primary response, which has mostly been met with shrugs and statements of blustery nationalism from the Kremlin. #-ad_banner-#Yet with every passing day, Russia’s pariah status is delivering a fresh blow to an already fragile economy. Russia’s Economic Ministry recently lowered the 2014 economic growth rate to just 0.5%, and that forecast was issued before the further declines in oil prices recently. The odds of a recession in Russia are rising, right at a time when the average Russian citizen is now seeing sticker shock for many goods. That’s because Russia under-invested in domestic production of a wide range of goods, having been contented to use oil earnings to import many goods. Yet a 20% slide in the ruble since the year began, to its lowest levels since the… Read More

Momentum investing works both ways. Stocks in a strong uptrend can continue to outperform the market, as is often discussed in StreetAuthority’s Maximum Profit newsletter. Yet stocks in a downtrend can watch the tide take them even further out to sea. Indeed many stocks, which had already dropped 20% or 30% from their 52-week highs earlier in the year have seen their downward spiral accelerate in recent weeks. On several recent occasions, the number of stocks making new 52-week lows on the Nasdaq and NYSE has exceeded 200, an amount not seen in quite some time. #-ad_banner-#Amongst the rubble, some… Read More

Momentum investing works both ways. Stocks in a strong uptrend can continue to outperform the market, as is often discussed in StreetAuthority’s Maximum Profit newsletter. Yet stocks in a downtrend can watch the tide take them even further out to sea. Indeed many stocks, which had already dropped 20% or 30% from their 52-week highs earlier in the year have seen their downward spiral accelerate in recent weeks. On several recent occasions, the number of stocks making new 52-week lows on the Nasdaq and NYSE has exceeded 200, an amount not seen in quite some time. #-ad_banner-#Amongst the rubble, some stocks have really tumbled, falling by half, or more, from their 52-week highs. In some respects, these are “falling knife,” stocks. You don’t want to catch them while they are plunging. Yet as they keep falling and falling, these stocks often turn into deep-value plays, setting the stage for considerable rebound potential when the broader investor mood shifts. It is nearly impossible to try and time their bottom. They could always fall a bit further, but deep-value plays don’t stay that way forever. With that in mind, I took a look at all of the stocks that have fallen at… Read More

In this five-year bull market, growth stocks have come in two flavors: those known as growth at a reasonable price and those known as growth at any price. Examples of the latter include Salesforce.com, Inc. (NYSE: CRM), Chipotle Mexican Grill, Inc. (NYSE: CMG) and Tesla Motors, Inc. (Nasdaq: TSLA). Such hot stocks are disconnected from any fundamental value and are seen by their backers as such game-changers that they must be bought and held, no matter what. Of course, some of these stock set-ups can end badly. Roughly a year ago, I asked if 3-D printing firm 3D Systems Corp. Read More

In this five-year bull market, growth stocks have come in two flavors: those known as growth at a reasonable price and those known as growth at any price. Examples of the latter include Salesforce.com, Inc. (NYSE: CRM), Chipotle Mexican Grill, Inc. (NYSE: CMG) and Tesla Motors, Inc. (Nasdaq: TSLA). Such hot stocks are disconnected from any fundamental value and are seen by their backers as such game-changers that they must be bought and held, no matter what. Of course, some of these stock set-ups can end badly. Roughly a year ago, I asked if 3-D printing firm 3D Systems Corp. (NYSE: DDD) was the most overvalued stock on the market. Aggressive accounting practices and a risky growth-through-acquisition strategy gave me pause. However, many growth-at-any price investors dismissed such concerns in subsequent months, pushing shares ever higher until they surpassed $90. I looked at the stock five months later and shares had tumbled back into the $60s, though I noted that “this remains a very expensive stock.” High valuations, looming patent expirations, rising competition, a lack of organic growth and margin pressures were just some of my concerns. Since then, shares have “re-rated lower,” as traders like to say. Read More

Elon Musk, the charismatic founder and CEO of Tesla Motors (Nasdaq: TSLA), is many things to people: Brilliant engineer, clever designer and corporate pitch man, all rolled in to one. He’ll be the first to say that you can’t build a $30 billion company (in market value) from scratch by thinking like a bureaucrat. #-ad_banner-#Trouble is, government bureaucrats may be ready to ruin Musk’s winning streak. A set of policies, put in place a few years ago, could put Musk — and Tesla — on the wrong end of a key battle shaping the auto industry. It’s No BS… Read More

Elon Musk, the charismatic founder and CEO of Tesla Motors (Nasdaq: TSLA), is many things to people: Brilliant engineer, clever designer and corporate pitch man, all rolled in to one. He’ll be the first to say that you can’t build a $30 billion company (in market value) from scratch by thinking like a bureaucrat. #-ad_banner-#Trouble is, government bureaucrats may be ready to ruin Musk’s winning streak. A set of policies, put in place a few years ago, could put Musk — and Tesla — on the wrong end of a key battle shaping the auto industry. It’s No BS In an October 2013 speech to auto technicians in Germany, Musk showed his usual flair for the dramatic: “Oh god, a fuel cell is so bullshit.” His subsequent rant focused on how fuel cell vehicles (FCVs) received a huge amount of hype, consumed millions in government research dollars, but have been a total dud in the marketplace. As far as he is concerned, battery-powered vehicles hold the key to the future. As a final zinger, he quipped that “Hydrogen is quite a dangerous gas. You know, it’s suitable for the upper stage of rockets, but not for cars.” What Musk… Read More

In the early stages of the bull market, investors flocked to companies with steady and growing dividends. Yet, since the market began to think about an eventual rise in interest rates back in May 2013, this asset class has lost a bit of luster. The concerns were quite logical: A steady rise in fixed-income yields naturally reduces the appeal of relatively riskier stocks. But the emerging economic crisis in Europe changes everything. It’s increasingly apparent that European economic troubles are here to stay for quite some time, which is likely to keep a lid on global interest rates. It’s a… Read More

In the early stages of the bull market, investors flocked to companies with steady and growing dividends. Yet, since the market began to think about an eventual rise in interest rates back in May 2013, this asset class has lost a bit of luster. The concerns were quite logical: A steady rise in fixed-income yields naturally reduces the appeal of relatively riskier stocks. But the emerging economic crisis in Europe changes everything. It’s increasingly apparent that European economic troubles are here to stay for quite some time, which is likely to keep a lid on global interest rates. It’s a bit of a goldilocks scenario for the U.S. economy, as low rates will help our economic recovery to expand without a rate rise headwind. You would suspect that the pullback in interest rates would help provide support to dividend-paying stocks, but many of them haven’t been able to escape the recent market rout. If you’ve been tracking divided payers but found their dividend yields to be too skimpy, you’re in luck. The market slump pushed many 2% yielders into the 3% range, many 3% yielders into the 4% range, etc. In the context of falling fixed income yields, such… Read More

While investors gauge the pulse of the market on a daily or weekly basis, and most companies weigh in on a quarterly basis, the executives at The Boeing Co. (NYSE: BA) think in terms of decades. Decisions they made a long time ago impact results now, and their current moves will impact shareholders well into the next decade. For these executives, the goal is quite simple: Invest massive sums in new designs and reap the rewards down the road. Back in October 2012, when I suggested Boeing as a top rebound candidate for coming years, I took note of a… Read More

While investors gauge the pulse of the market on a daily or weekly basis, and most companies weigh in on a quarterly basis, the executives at The Boeing Co. (NYSE: BA) think in terms of decades. Decisions they made a long time ago impact results now, and their current moves will impact shareholders well into the next decade. For these executives, the goal is quite simple: Invest massive sums in new designs and reap the rewards down the road. Back in October 2012, when I suggested Boeing as a top rebound candidate for coming years, I took note of a looming surge in free cash flow that could be sustained for many years to come. Since my last look at the company, Boeing became a free cash flow machine. For the three-year period that ends in December, Boeing is on track to rack up a cumulative $18 billion in free cash flow. That has helped set the stage for 10% annual dividend increases over the past few years and, by the looks of things, there’s plenty more where that came from. Because Boeing is making planes as fast it can (and at full list prices), and thanks to… Read More