​​​​​​We’re now more than a half decade into the shale revolution, which has completely changed the energy industry and the U.S. economy. #-ad_banner-#The surging production of crude oil and natural gas equates to huge profits for drillers and energy service providers, a boost in tax receipts for Uncle Sam and a taming effect on our country’s onerous trade deficits. The good news: output in shale regions keeps on rising, which may eventually enable the U.S to become a net exporter of crude oil. But not quite yet. The U.S. still maintains a multi-decade restriction against the export of… Read More

​​​​​​We’re now more than a half decade into the shale revolution, which has completely changed the energy industry and the U.S. economy. #-ad_banner-#The surging production of crude oil and natural gas equates to huge profits for drillers and energy service providers, a boost in tax receipts for Uncle Sam and a taming effect on our country’s onerous trade deficits. The good news: output in shale regions keeps on rising, which may eventually enable the U.S to become a net exporter of crude oil. But not quite yet. The U.S. still maintains a multi-decade restriction against the export of crude oil and policy makers have also been applying the brakes on plans to make a massive push into natural gas exports. However, crude oil export restrictions don’t apply to refined energy products, such as diesel and gasoline. And the numbers bear out a growing niche: Back in 2008, our nation exported roughly 63 million barrels of gasoline. Fast forward to 2013, and that figure exceeded 140 million barrels, according to the Energy Information Administration.  Surging Gasoline Exports Year 2008 2013 2013 (First Five Months) 2014 (First Five Months) (Millions of Barrels) 62,840 143,176 57,654 65,905 Source: EIA Through the… Read More

Although the hedge fund industry attracts the best and the brightest, few fund managers are considered to be a “genius.” I think Baupost’s Seth Klarman deserves such accolades, and people like Warren Buffett and George Soros are inarguably brilliant. But the smartest manager in the business may be one that many have never heard of. I’m talking about Jim Simons. According to a recent glowing profile in the New York Times Simons:        — Received his doctorate at 23;         — Advanced code breaking for the National Security Agency at… Read More

Although the hedge fund industry attracts the best and the brightest, few fund managers are considered to be a “genius.” I think Baupost’s Seth Klarman deserves such accolades, and people like Warren Buffett and George Soros are inarguably brilliant. But the smartest manager in the business may be one that many have never heard of. I’m talking about Jim Simons. According to a recent glowing profile in the New York Times Simons:        — Received his doctorate at 23;         — Advanced code breaking for the National Security Agency at 26;         — Led a university math department at 30;         — Won geometry’s top prize at 37;         — And founded Renaissance Technologies, one of the world’s most successful hedge funds, at 44. At Renaissance, Simons has built a strong long-term track record, by deploying a massive amount of computing power to identify winning picks, known in the field as “quant investing.” Based on his recent stock buys, we have a pretty clear sense of what Simons’… Read More

Over the past decade, several national radio station operators have declared bankruptcy, and those that remain are on the ropes.  Shares of Cumulus Media (Nasdaq: CMLS), for example, traded for $20 a decade ago, but now fetch less than $5. These radio firms have been hit by the double-barreled assault of satellite radio and audio streaming  services. Indeed, the next generation of car stereos is more likely to feature buttons for Pandora (NYSE: P), Sirius XM (Nasdaq: SIRI) or Spotify. The number of listeners inclined to peruse the AM and FM dials will dwindle. Still, it’s an industry in flux… Read More

Over the past decade, several national radio station operators have declared bankruptcy, and those that remain are on the ropes.  Shares of Cumulus Media (Nasdaq: CMLS), for example, traded for $20 a decade ago, but now fetch less than $5. These radio firms have been hit by the double-barreled assault of satellite radio and audio streaming  services. Indeed, the next generation of car stereos is more likely to feature buttons for Pandora (NYSE: P), Sirius XM (Nasdaq: SIRI) or Spotify. The number of listeners inclined to peruse the AM and FM dials will dwindle. Still, it’s an industry in flux and even Sirius XM and Pandora have had their share of controversy. My longer-term concerns around Sirius XM have not gone away.  The company’s satellite radio service is popular now, but with firms like Apple, Google and Microsoft aiming to control in-car entertainment systems, Sirius can no longer count on strong direct relationships with auto makers to pre-install its platform. The balance is already titling towards streaming audio services such as Pandora, Spotify and others. Pandora, for its part, has had plenty of detractors. As I noted back in May, Pandora’s Q1 results raised concerns about growth and margins. Second-quarter results were slightly better,… Read More

Over the past two years, investors have come to think of U.S. and Europe in a similar light. Each area represents 25% of global GDP, each is getting a major dose of stimulus from central bankers to kick their economies into gear, and the major stock markets in the U.S. and Europe have all moved in lock-step. Indeed the Vanguard FTSE European ETF (NYSE: VGK) has shown a remarkable correlation with the S&P 500.  But that correlation is breaking down. In recent months, European stocks have begun to slump and further downside may lie ahead. Use this… Read More

Over the past two years, investors have come to think of U.S. and Europe in a similar light. Each area represents 25% of global GDP, each is getting a major dose of stimulus from central bankers to kick their economies into gear, and the major stock markets in the U.S. and Europe have all moved in lock-step. Indeed the Vanguard FTSE European ETF (NYSE: VGK) has shown a remarkable correlation with the S&P 500.  But that correlation is breaking down. In recent months, European stocks have begun to slump and further downside may lie ahead. Use this opportunity to take a deep look at your European exposure—before it’s too late. Unless you own shares of a major European company, or a Europe-focused mutual find or ETF, you may not think you have much exposure to Europe. But think again. Many companies in the S&P 500 derive a decent chunk of sales and profits from their European operations. And for some companies, the exposure is considerable.   You’ll find a high level of European exposure in four sectors in particular: technology, industrials, consumer staples and materials producers. … Read More

By now, many investors have heard about the massive gambling mecca in the Chinese protectorate of Macau. Billions of dollars have poured into the strip, creating a similar amount of profits for investors.  Yet investors may not have heard of the prologue to this story. The “Macau story” is played out: growth has sharply slowed and investment opportunities have dried up. Or so the financial press would have you believe.  The truth is quite different. For far-sighted investors, a fresh chance at upside has emerged, especially for my favorite Macau gaming stock, Melco Crown… Read More

By now, many investors have heard about the massive gambling mecca in the Chinese protectorate of Macau. Billions of dollars have poured into the strip, creating a similar amount of profits for investors.  Yet investors may not have heard of the prologue to this story. The “Macau story” is played out: growth has sharply slowed and investment opportunities have dried up. Or so the financial press would have you believe.  The truth is quite different. For far-sighted investors, a fresh chance at upside has emerged, especially for my favorite Macau gaming stock, Melco Crown Entertainment (Nasdaq: MPEL). A nearly 40% plunge since early March, paired with a still-robust growth outlook, means it’s time to buy.    I first looked at Melco Crown four years ago and I encourage you to read what I wrote back then before continuing. The expansion strategy laid out then exceeded my wildest expectations. Shares went on to deliver a nearly 1,000% gain.   #-ad_banner-#​Maturing, not slowing The era of rapid growth for Macanese casinos is nearing an end. Chinese citizens — especially the high-rollers — are feeling more… Read More

In the board rooms of Best Buy (NYSE: BBY), Barnes & Noble (NYSE :BKS), Bed, Bath & Beyond (Nasdaq: BBBY) and many other retailers, the same two concerns exist: Consumers aren’t spending.  Retail sales grew just 2.9% in the first six months of 2014, according to the National Retail Federation.  And whatever sales growth that can be had is often sucked up by Amazon.com (Nasdaq: AMZN), which is expected to boost revenue $15 billion this year and another $20 billion in 2015 to nearly $110 billion in sales.   #-ad_banner-#​It’s… Read More

In the board rooms of Best Buy (NYSE: BBY), Barnes & Noble (NYSE :BKS), Bed, Bath & Beyond (Nasdaq: BBBY) and many other retailers, the same two concerns exist: Consumers aren’t spending.  Retail sales grew just 2.9% in the first six months of 2014, according to the National Retail Federation.  And whatever sales growth that can be had is often sucked up by Amazon.com (Nasdaq: AMZN), which is expected to boost revenue $15 billion this year and another $20 billion in 2015 to nearly $110 billion in sales.   #-ad_banner-#​It’s only once you realize that shares of Amazon.com are off 20% this year, that you begin to understand that every corner of the retail sector is hurting. Many retailers now realize that they should have devoted more resources to their e-commerce portals. Bed, Bath & Beyond, for example, is just now taking its web presence seriously — and that came only after its shares were pummeled.  While some firms such as Walmart are spending hundreds of millions of dollars to internally boost their online sales platforms, others lack the money or skill to create a world-class website. Read More

This has been a bad month for Dan Hesse. The sharp plunge in Sprint (NYSE: S), which wiped out more than $10 billion in market value over the past month, cost him his job as the company’s CEO. And this embattled former executive isn’t alone.  #-ad_banner-#Dozens of other companies saw their shares plummet over the past month in the face of dismal quarterly results and other setbacks. You can expect to find more executive departures in many of the upcoming board meetings — especially at  firms where problems surfaced during Q2 and will likely heed the call for… Read More

This has been a bad month for Dan Hesse. The sharp plunge in Sprint (NYSE: S), which wiped out more than $10 billion in market value over the past month, cost him his job as the company’s CEO. And this embattled former executive isn’t alone.  #-ad_banner-#Dozens of other companies saw their shares plummet over the past month in the face of dismal quarterly results and other setbacks. You can expect to find more executive departures in many of the upcoming board meetings — especially at  firms where problems surfaced during Q2 and will likely heed the call for a major business overhaul. Yet, the outlook for some of the companies with falling stock prices doesn’t look so bleak. A select few possess the ingredients for a solid snapback in coming months, easing the pressure on the embattled management teams.  Here’s a look at three stocks that plunged at least 25% over the past month, but now appear poised to make up for lost ground before the year is out.  1.    Insmed (Nasdaq: INSM) This biotech stock had been building an impressive stock chart. It has set higher highs and higher lows for nearly a year as investors… Read More

It’s best to catch investors in a good mood. If companies deliver bad news when they are optimistic, then they will often shrug it off. Yet, when the collective investor mood sours, even the best news can be ignored by the crowd.  #-ad_banner-#That’s surely been the case… Read More

Although the major market averages remain within an arm’s reach of their all-time highs, many individual stocks have entered their own bear market in recent months. With few investors showing much buying interest right now, shares of these stocks have pierced their 52-week lows.  The key is to track these stocks because they could emerge as solid value plays. I’ve found four stocks that could fit the bill during this midsummer swoon.  Loews (NYSE: L)   52-week high/low: $49.43/$41.69  Recent price: $41.75 One of the most unheralded… Read More

Although the major market averages remain within an arm’s reach of their all-time highs, many individual stocks have entered their own bear market in recent months. With few investors showing much buying interest right now, shares of these stocks have pierced their 52-week lows.  The key is to track these stocks because they could emerge as solid value plays. I’ve found four stocks that could fit the bill during this midsummer swoon.  Loews (NYSE: L)   52-week high/low: $49.43/$41.69  Recent price: $41.75 One of the most unheralded stories of America’s recovery from the Great Recession of 2008 is the sharp improvement in the balance sheets of financial services firms. These firms have been rebuilding their capital base at a rapid rate, but still don’t get credit for their efforts.  Case in point: Loews, a diversified insurer that has been generating robust profits and parking those earnings on the balance sheet. Loews’ book value is on pace to nearly double this year from where it was at the end of 2008.  Loews’ Book Value Keeps Rising   2008 2009 2010 2011… Read More

Every Friday, I scan the movie reviews to see if there is a new film I want to go see. And every week, I fail to find anything that appeals to me. Many others must feel the same way, seeing as box office receipts are off sharply this year, making this a season of misery for film studios. And no studio is feeling the pain more than Dreamworks Animation SKG (NYSE: DWA), which has slid 25% since I panned the company’s business model five months ago. Shares had already been in freefall and are now off more than 40% this… Read More

Every Friday, I scan the movie reviews to see if there is a new film I want to go see. And every week, I fail to find anything that appeals to me. Many others must feel the same way, seeing as box office receipts are off sharply this year, making this a season of misery for film studios. And no studio is feeling the pain more than Dreamworks Animation SKG (NYSE: DWA), which has slid 25% since I panned the company’s business model five months ago. Shares had already been in freefall and are now off more than 40% this year.     Yet with much of the bad news now priced into the stock, Dreamworks deserves a fresh look. The company is making moves now that should yield solid rewards in a few years. Sequels And More Sequels For a studio that was founded by three industry visionaries — Steven Spielberg, Jeffrey Katzenberg and David Geffen — Dreamworks hasn’t shown a lot of creative vision lately. It hasn’t won an Academy Award for any of its films since 2005, and the studio is increasingly content to simply churn out repeated sequels of key titles, whether they were box-office… Read More