A decade ago, Apple (Nasdaq: AAPL) was a struggling computer maker on the cusp of reinventing itself, thanks to the imminent launch of iPods, iTunes, and many other hardware and services that would help propel the company to an eventual $585 billion market value. Back then, Google (Nasdaq: GOOG) was also on the cusp of strong growth, thanks to its impressive search engine. Google’s current $400 billion market value is a testament to that company’s greatness. #-ad_banner-#A decade on, Apple and Google have taken aim squarely at each other. Each now offers a mobile phone platform, both companies are using… Read More

A decade ago, Apple (Nasdaq: AAPL) was a struggling computer maker on the cusp of reinventing itself, thanks to the imminent launch of iPods, iTunes, and many other hardware and services that would help propel the company to an eventual $585 billion market value. Back then, Google (Nasdaq: GOOG) was also on the cusp of strong growth, thanks to its impressive search engine. Google’s current $400 billion market value is a testament to that company’s greatness. #-ad_banner-#A decade on, Apple and Google have taken aim squarely at each other. Each now offers a mobile phone platform, both companies are using their operating systems and hardware ecosystems to obliterate the traditional PC industry, each firm is gaining strong traction with their entertainment portals (iTunes and Google Play), and each intends to play a key role in the next generation of car stereos. As these business models converge, it becomes easier to compare these two firms on an apples-to-apples basis. Notably, Apple has become the value play, while in some respects, Google has become the superior growth model. As an example, Apple is settling into a phase of respectable growth while Google is still in the midst of rapid growth. Read More

A sideways stock chart can be deceiving. Just because a stock is directionless doesn’t mean that a company is struggling to improve results. It’s often simply the case that investors are waiting until the stock becomes more timely.  #-ad_banner-#For banking giant Citigroup (NYSE: C), that time is now. Solid second-quarter results imply even better days to come in future quarters. I took a look at Citigroup last week and noted that the bank trades for less than 75% of tangible book value. In fact it hasn’t traded above book value in since 2010. As a point of reference, rival… Read More

A sideways stock chart can be deceiving. Just because a stock is directionless doesn’t mean that a company is struggling to improve results. It’s often simply the case that investors are waiting until the stock becomes more timely.  #-ad_banner-#For banking giant Citigroup (NYSE: C), that time is now. Solid second-quarter results imply even better days to come in future quarters. I took a look at Citigroup last week and noted that the bank trades for less than 75% of tangible book value. In fact it hasn’t traded above book value in since 2010. As a point of reference, rival Wells Fargo (NYSE: WFC) for nearly twice tangible book value. Citigroup’s pariah status among investors stems from a set of lingering problems. First, like all major U.S. banks, it has seen a drop-off in its trading and banking revenues, in part due to the crackdown associated with Dodd-Frank regulations. Second, its industry-leading emerging-markets exposure is seen as more of a liability than a virtue these days, especially as concerns about China hang over many other Asian economies as well. Third, a series of charges have led to very choppy quarterly results, and investors are clamoring for more predictability. On a… Read More

When it comes to double-digit yields, there’s always a catch. #-ad_banner-#Some investments, such as the Sandridge Mississippian Trust I (NYSE: SDT) or the Whiting USA Trust II (NYSE: WHZ) offer dividend yields in excess of 20% simply because the market clearly understands that projected income streams will soon peter out. After accounting for the present value of future cash flows, these investments can make sense to investors who want to front-load the timing of income streams. Other high-yielders, such as oil refiners Alon USA Partners LP (Nasdaq: ALDW) and CVR Refining (NYSE: CVRR), each of which offers a yield in… Read More

When it comes to double-digit yields, there’s always a catch. #-ad_banner-#Some investments, such as the Sandridge Mississippian Trust I (NYSE: SDT) or the Whiting USA Trust II (NYSE: WHZ) offer dividend yields in excess of 20% simply because the market clearly understands that projected income streams will soon peter out. After accounting for the present value of future cash flows, these investments can make sense to investors who want to front-load the timing of income streams. Other high-yielders, such as oil refiners Alon USA Partners LP (Nasdaq: ALDW) and CVR Refining (NYSE: CVRR), each of which offers a yield in the 15% range, offer erratic dividends (thanks to unpredictable refining profit margins), but can still be suitable for yield-seekers who can stomach that kind of bumpy dividend performance. Yet in many other instances, a double-digit yield can simply be a trap for unwitting investors. They may have the appearance of steady dividend production, but face tremendous challenges that likely spell a reduction — or outright elimination — of the dividend. Here are two examples of the kind of double-digit yielders that you should avoid. 1. Javelin Mortgage (NYSE: JMI ) This company is structured as a real… Read More

At the end of World War II, thousands of U.S. soldiers stayed behind in Europe, either as active-duty soldiers or as tourists exploring the continent’s cities and countryside. #-ad_banner-#A key source of appeal: The U.S. dollar was far more powerful than rival European currencies, making all kinds of European goods and services stunningly cheap. Those days are long gone. And if you’ve been abroad in recent years, you haven’t been hearing much about the almighty dollar. In fact, measured against a basket of other top currencies, the U.S. dollar index has slid from 96 in 2004 to 88 in 2009,… Read More

At the end of World War II, thousands of U.S. soldiers stayed behind in Europe, either as active-duty soldiers or as tourists exploring the continent’s cities and countryside. #-ad_banner-#A key source of appeal: The U.S. dollar was far more powerful than rival European currencies, making all kinds of European goods and services stunningly cheap. Those days are long gone. And if you’ve been abroad in recent years, you haven’t been hearing much about the almighty dollar. In fact, measured against a basket of other top currencies, the U.S. dollar index has slid from 96 in 2004 to 88 in 2009, to a recent 80, according to FXStreet.com. That steady slide has had a broad set of effects on the U.S. economy. Tourists have surely felt the pain, but many U.S. companies have been able to find a more receptive market for their exports. Global oil prices, which are also denominated in dollars, have also been boosted by a weaker greenback. Get ready for the math to start going in reverse: In the years ahead, the stage is set for a dollar rally, which may impact your portfolio in unexpected ways. To understand the looming currency reversal, it helps… Read More

What’s your dividend style? Do you seek out the highest dividend yields, or stocks with the most impressive track record of dividend growth? If it’s the latter, then you’re surely aware of the S&P 500 Dividend Aristocrats, which we have written about on many occasions. In an interesting twist on this theme, my colleague Christian Hudspeth recently applied a “Dogs of the Dow”-style approach to this group, focusing on the 10 components in this index that sport the current highest yields. (For an updated look at the relative yields, click here and sort by yield.) I like… Read More

What’s your dividend style? Do you seek out the highest dividend yields, or stocks with the most impressive track record of dividend growth? If it’s the latter, then you’re surely aware of the S&P 500 Dividend Aristocrats, which we have written about on many occasions. In an interesting twist on this theme, my colleague Christian Hudspeth recently applied a “Dogs of the Dow”-style approach to this group, focusing on the 10 components in this index that sport the current highest yields. (For an updated look at the relative yields, click here and sort by yield.) I like Christian’s approach. It’s likely to continually produce solid investment candidates, with its focus on stocks that are currently out of favor (dogs, in other words) but poised to win back converts. There’s also another way you can focus on this group of 54 stocks: Forget about yields, and focus on business models that are best geared for the next decade or even half-century. Here are my three favorite buy-and-hold Dividend Aristocrats for the years ahead. 1. Pentair (NYSE: PNR) It’s impossible to know what our economy will look like in the future, but we’ll likely be driving autonomous cars,… Read More

It’s been a summer of open windows and dormant air conditioners in the eastern U.S. as the mercury has failed to break 85 degrees on most days. Nighttime lows are in the mid-50s across much of New England. #-ad_banner-#And that partially explains why natural gas prices are plunging to seven-month lows. Gas-fueled power plants are operating at a low hum as electricity demand has been unusually tepid. When you consider that late July typically represents a turning point for summer temperatures, this may turn out to be a year without any major heat waves. That’s good news indeed for residents… Read More

It’s been a summer of open windows and dormant air conditioners in the eastern U.S. as the mercury has failed to break 85 degrees on most days. Nighttime lows are in the mid-50s across much of New England. #-ad_banner-#And that partially explains why natural gas prices are plunging to seven-month lows. Gas-fueled power plants are operating at a low hum as electricity demand has been unusually tepid. When you consider that late July typically represents a turning point for summer temperatures, this may turn out to be a year without any major heat waves. That’s good news indeed for residents in the eastern U.S. after enduring an unusually dispiriting frigid winter. As demand for gas remains subpar, gas storage facilities are refilling at a rapid rate, turning gas back into a buyer’s market. That’s a quick change from six months ago when gas was being consumed at a faster-than-normal rate. And the resulting price collapse has left many to wonder: Will gas prices keep plunging, or have they hit bottom? The answer to that question: Gas prices are likely to keep falling. Tepid demand is likely to lead to more increases in the amount of gas in storage,… Read More

Lost in all of the global action around Israel and Gaza, Russia and Ukraine and the slow-burning Iraqi civil war, investors have already forgotten about Banco Espirito Santo. This Portuguese bank spooked global markets a week ago on concerns that it may be heading for default. Indeed, the bank did in fact declare bankruptcy this past weekend. For investors taking note of a seemingly endless bull market, that may have been a warning shot. After all, U.S. stocks stumbled on several occasions in the early years after the Great Recession of 2008, every time Europe began to wobble. Judging by… Read More

Lost in all of the global action around Israel and Gaza, Russia and Ukraine and the slow-burning Iraqi civil war, investors have already forgotten about Banco Espirito Santo. This Portuguese bank spooked global markets a week ago on concerns that it may be heading for default. Indeed, the bank did in fact declare bankruptcy this past weekend. For investors taking note of a seemingly endless bull market, that may have been a warning shot. After all, U.S. stocks stumbled on several occasions in the early years after the Great Recession of 2008, every time Europe began to wobble. Judging by recent economic data, Europe may again start to dominate the headlines, and U.S. investors need to start paying close attention again. For that matter, if your portfolio has direct exposure to Europe, it may be time to trim your positions. European stocks have been marching ever higher, but it is increasingly apparent that it was too soon for celebration. #-ad_banner-#​Debt And Growth: An Unmatched Pair The entire basis for the rally in European stocks has been predicated on an expectation that a resumption of economic growth would help to bring massive debt burdens into check. Read More

Most investors have never heard of Central Securities Corp. (NYSE: CET). The investment firm was launched on Oct. 1, 1929, just weeks before an epic stock market crash — but it survived that era and has made it intact for more than 80 years, albeit in a low-key fashion. #-ad_banner-#Rather than offer a range of mutual funds, CET offers just one closed-end fund. Yet it’s the kind of fund that investors should always seek out: The stated value of its holdings is worth a lot more than the actual trading price. Said another way, this closed-end fund owns $28.20 a… Read More

Most investors have never heard of Central Securities Corp. (NYSE: CET). The investment firm was launched on Oct. 1, 1929, just weeks before an epic stock market crash — but it survived that era and has made it intact for more than 80 years, albeit in a low-key fashion. #-ad_banner-#Rather than offer a range of mutual funds, CET offers just one closed-end fund. Yet it’s the kind of fund that investors should always seek out: The stated value of its holdings is worth a lot more than the actual trading price. Said another way, this closed-end fund owns $28.20 a share worth of assets, but trades for less than $24. CET has a solid portfolio, holding companies such as Intel (Nasdaq: INTC), Citigroup (NYSE: C) and the Bank of New York Mellon (NYSE: BK). The management fee is 0.77%, which is tolerable when you consider the $4-a-share discount to net asset value (NAV). And this isn’t the only fund trading at a greater than 10% discount to NAV. I’ve dug through the Morningstar database, weeding out closed-end funds that hold little appeal, and found a few more of the discount-to-NAV gems. 1. Ellsworth Fund (NYSE: ECF )  … Read More

You have to be impressed with the recent 30% six-month rally for chipmaker Intel (Nasdaq: INTC). #-ad_banner-#For a company that was already worth more than $130 billion this past winter, such rapid upside is a rare feat. Credit goes to improving demand for its chips — but this stock is also getting a nice lift from a move to add another $20 billion to an ongoing share buyback programs. Intel has already shrunk its share count by more than 10% over the past three years, and this move could deliver another 10% reduction in shares outstanding. (It would have been… Read More

You have to be impressed with the recent 30% six-month rally for chipmaker Intel (Nasdaq: INTC). #-ad_banner-#For a company that was already worth more than $130 billion this past winter, such rapid upside is a rare feat. Credit goes to improving demand for its chips — but this stock is also getting a nice lift from a move to add another $20 billion to an ongoing share buyback programs. Intel has already shrunk its share count by more than 10% over the past three years, and this move could deliver another 10% reduction in shares outstanding. (It would have been wiser to be more aggressive when shares were really washed out a year ago, but that’s a discussion for another day.) In a similar vein, shares of Cisco Systems (Nasdaq: CSCO) are up an impressive 60% over the past two years, and Cisco has also been a bold acquirer of its own shares: The networking giant has shrunk it share count by more than 1.3 billion over the past eight years, and investors have to come to appreciate the profound impact such a move has on per-share profits. These buyback kings will soon have company. Three major firms are on… Read More

Looking at a stock in the context of an analyst’s price target can be a tricky endeavor. #-ad_banner-#Most analysts place such targets in the context of where they believe shares will trade in a quarter or two. And that’s not really how you should look at a stock. The focus on near-term quarterly results can be too short-sighted. The most profitable style of investing is to focus on stocks that possess considerable upside (or downside) a year or two down the road. Still, I monitor analysts’ price targets anyway, often in search of a big gap between the current price… Read More

Looking at a stock in the context of an analyst’s price target can be a tricky endeavor. #-ad_banner-#Most analysts place such targets in the context of where they believe shares will trade in a quarter or two. And that’s not really how you should look at a stock. The focus on near-term quarterly results can be too short-sighted. The most profitable style of investing is to focus on stocks that possess considerable upside (or downside) a year or two down the road. Still, I monitor analysts’ price targets anyway, often in search of a big gap between the current price and the target. Anytime you see an analyst suggest a stock is worth 50% or even 100% more than the current share price, it’s surely worth further research. Here are three such stocks that could surge far higher — if analysts are on the mark with their predictions. 1. ZS Pharma (Nasdaq: ZSPH )​ When it comes to pulling off an IPO, timing is everything. A broad range of young biotech companies came public early this year, only to get wiped out in a late winter rout. Many of the biotech stocks that swooned back then are only now regaining… Read More