Timing a short squeeze can be tricky. Jump in too soon and you could be sitting on dead money until management improves its outlook. Wait too long and you risk missing most of the upside. The most unloved companies are usually unloved for a reason — whether thanks to declining sales or some other fundamental weakness. But when sentiment turns, the rush to cover short positions can provide swift profits for the well-positioned bull. One of the most unloved companies in the market could be coming up on an inflection point. It’s a leader in its industry but… Read More

Timing a short squeeze can be tricky. Jump in too soon and you could be sitting on dead money until management improves its outlook. Wait too long and you risk missing most of the upside. The most unloved companies are usually unloved for a reason — whether thanks to declining sales or some other fundamental weakness. But when sentiment turns, the rush to cover short positions can provide swift profits for the well-positioned bull. One of the most unloved companies in the market could be coming up on an inflection point. It’s a leader in its industry but has been plagued by customer attrition over the past couple of years. Management has big plans for next year, though, saying the company should start booking a net gain in customers again. As a result, sentiment could be about to take a bullish turn. #-ad_banner-# The Tide Could Turn For This Unloved Leader In 2016 Only three other stocks in the S&P 500 are more heavily shorted than ADT Corporation (NYSE: ADT), which has 24.5% of its shares held short in the market. GameStop (NYSE: GME) almost perpetually tops this list as investors remain convinced it can’t win over the… Read More

The Obama Administration began August by proposing new rules for the EPA to cut carbon dioxide (CO2) emissions at U.S. coal-fired electricity plants by 32% from the 2005 levels through 2030. This was followed last week by another proposal to cut methane emissions from oil and gas drilling by 40% through 2025. Much of these emissions proposals depend on the development of some form of Carbon Capture & Storage (CCS) technology: the process of capturing the carbon dioxide released by burning fossil fuels could finally end the battle between the environment and a growing global economy hungry for cheap fuel… Read More

The Obama Administration began August by proposing new rules for the EPA to cut carbon dioxide (CO2) emissions at U.S. coal-fired electricity plants by 32% from the 2005 levels through 2030. This was followed last week by another proposal to cut methane emissions from oil and gas drilling by 40% through 2025. Much of these emissions proposals depend on the development of some form of Carbon Capture & Storage (CCS) technology: the process of capturing the carbon dioxide released by burning fossil fuels could finally end the battle between the environment and a growing global economy hungry for cheap fuel sources like oil and coal. #-ad_banner-#Besides the latest push from the United States, China has also said that it would build carbon capture coal plants to reduce emissions. A report by Schlumberger and the SBC Energy Institute projects commercial viability of CCS by 2020 with U.S. government commitments for 27 large projects. The technology has been expensive to develop, limiting the players that could be involved. And because of the expense to research and development and the uncertainty around CCS technology, few companies have built a name in the space. But one company has regularly been a recipient of government… Read More

The stock market has been quite choppy in recent weeks, and concerns are growing that the six-year bull market may be at an end. But catalysts for further upside remain: valuations in the energy sector have fallen along with oil prices and many of the world’s largest central banks are still pumping money into their economies to fuel growth. Even in China, where slowing growth is causing chaos in commodity prices, economic growth remains solid, with the government taking steps to boost the economy. #-ad_banner-#This environment creates a perfect stock picker’s market. Instead of a one-way bet on higher prices,… Read More

The stock market has been quite choppy in recent weeks, and concerns are growing that the six-year bull market may be at an end. But catalysts for further upside remain: valuations in the energy sector have fallen along with oil prices and many of the world’s largest central banks are still pumping money into their economies to fuel growth. Even in China, where slowing growth is causing chaos in commodity prices, economic growth remains solid, with the government taking steps to boost the economy. #-ad_banner-#This environment creates a perfect stock picker’s market. Instead of a one-way bet on higher prices, investors will need to hedge market weakness by picking the losers along with the winners. Pairing your long positions against shorts offers the opportunity not only to hedge lower prices but gain on both sides of the trade. And two stocks in the relatively expensive tool and accessories industry may offer the perfect paired trade opportunity. Using The Right Tools For A Long-Short Strategy Within its coverage universe, Morningstar found tools and accessories to be one of the most expensive industries, at 1.47 times its fair value estimate. One company in the group still offers upside, as it is well-positioned… Read More

With the vast majority of companies in the S&P 500 having reported earnings, it appears the index will post the first earnings decline since Q3 2012. Worse still, we will likely see the first back-to-back quarters of revenue decline since 2009, with Q2 sales estimated to drop 3.3%. Read More

While the broader stock market has been in a recent mini-slump, a group of social media stocks have stumbled very badly. Shares of Twitter (NYSE: TWTR) and LinkedIn Corporation (NYSE: LNKD), for example, have slipped 15% to 20% in just a few months — in sharp contrast to Facebook (Nasdaq: FB), which remain near all-time highs. The contrasting moves should come as no surprise to careful watchers of key digital advertising trends. #-ad_banner-# How Do Advertisers See Social Media? To see the social media as advertisers do, investors only need to put themselves in marketers’ shoes. Which sites offer… Read More

While the broader stock market has been in a recent mini-slump, a group of social media stocks have stumbled very badly. Shares of Twitter (NYSE: TWTR) and LinkedIn Corporation (NYSE: LNKD), for example, have slipped 15% to 20% in just a few months — in sharp contrast to Facebook (Nasdaq: FB), which remain near all-time highs. The contrasting moves should come as no surprise to careful watchers of key digital advertising trends. #-ad_banner-# How Do Advertisers See Social Media? To see the social media as advertisers do, investors only need to put themselves in marketers’ shoes. Which sites offer the audience I want and can drive appreciable traffic back to the product?   Research firm Shareaholic found that 31% of traffic to websites originated from social media in the fourth quarter of 2014, up from 23% the year before. Of that traffic, Facebook accounted for 25% of traffic (79% of all social media referrals) followed by Pinterest, which originated 5% of the traffic. Twitter and LinkedIn originated just 0.8% and 0.03% of website social referral traffic. Worse still for the two lagging networks, their share of traffic origination has continuously fallen over the last three years.   Social Media… Read More

The odds of a September interest rate hike surged to 52% on Wednesday, up from 38% at the beginning of the week. The jump — which came on the back of surprisingly strong U.S. service-sector growth and comments by Atlanta Federal Reserve President Dennis Lockhart — caused some rate-sensitive stocks… Read More

With all of the recent stock market gyrations associated with events in Greece and China, investors may have failed to notice what is happening in the bond market.  The rate on the 10-year U.S. Treasury has fallen nearly 10% to 2.2% since mid-July, taking corporate bond yields down as well. The yield in one sector has actually increased though and has rarely been higher. Besides the higher yield, values have come down and historical data suggest solid returns over the next year.   #-ad_banner-# Earn A 7% Yield And 40% Potential Upside Strong long-term demand for pipeline transportation and… Read More

With all of the recent stock market gyrations associated with events in Greece and China, investors may have failed to notice what is happening in the bond market.  The rate on the 10-year U.S. Treasury has fallen nearly 10% to 2.2% since mid-July, taking corporate bond yields down as well. The yield in one sector has actually increased though and has rarely been higher. Besides the higher yield, values have come down and historical data suggest solid returns over the next year.   #-ad_banner-# Earn A 7% Yield And 40% Potential Upside Strong long-term demand for pipeline transportation and energy storage has not been enough to save midstream master limited partnerships (MLPs) from their energy-related selloff. Energy may have fallen out of favor lately, but it’s important to remember that the U.S. energy production renaissance is a multi-decade theme. While oil and gas production may ebb and flow, the demand for pipeline transportation will remain extremely strong. A clear sign of industry demand: Roughly 850,000 barrels of oil are transported daily on our nation’s rails, despite relatively higher costs for that mode of transport. The knee-jerk reaction to lower energy prices has led to steep cuts in capital spending… Read More

Recent market commentary is starting to remind me of the periods in 2000 and 2008 just before the bottom dropped out of the market. Leading up to the bursting of the tech bubble, for example, analysts increasingly ignored valuation and warnings that earnings expectations were too high.  Similarly, housing prices peaked well before the stock market’s top in 2007, while the Fed had raised rates four times in 2006. Still, no one believed that the economy could slow.  #-ad_banner-# This time around, earnings for the second quarter are looking weak, the U.S. economy contracted 0.2% in the… Read More

Recent market commentary is starting to remind me of the periods in 2000 and 2008 just before the bottom dropped out of the market. Leading up to the bursting of the tech bubble, for example, analysts increasingly ignored valuation and warnings that earnings expectations were too high.  Similarly, housing prices peaked well before the stock market’s top in 2007, while the Fed had raised rates four times in 2006. Still, no one believed that the economy could slow.  #-ad_banner-# This time around, earnings for the second quarter are looking weak, the U.S. economy contracted 0.2% in the first quarter of 2015 and estimates for the second quarter are as low as a tepid 2% growth… yet no one seems to care.  Take Apple (NASDAQ: AAPL), for example. Only one analyst of the 20 covering its earnings release cut expectations for the stock, despite the fact that the company forecast next quarter sales that fell short of expectations. Piper Jaffray (NYSE: PJC) analyst Gene Munster even raised his price target by 6% to $172 per share, more than 37% above the current trade. Apple is just one example, and while I won’t attempt to predict a stock market… Read More

#-ad_banner-#”Big Picture” investors like to focus on major themes, and a pair of them are emerging that could serve as key catalysts for the stock market in the next decade. These themes will be underpinned by trillions in spending, enough to lift entire sectors. And certain companies are very well-positioned to take advantage of the trends. In fact, one in particular should benefit from both mega trends. Climate Change And The Economic Impact The U.S. National Oceanic and Atmospheric Administration (NOAA) recently released its State of the Climate report highlighting record heat across the globe. Read More

#-ad_banner-#”Big Picture” investors like to focus on major themes, and a pair of them are emerging that could serve as key catalysts for the stock market in the next decade. These themes will be underpinned by trillions in spending, enough to lift entire sectors. And certain companies are very well-positioned to take advantage of the trends. In fact, one in particular should benefit from both mega trends. Climate Change And The Economic Impact The U.S. National Oceanic and Atmospheric Administration (NOAA) recently released its State of the Climate report highlighting record heat across the globe. Last year was the hottest in 135 years of record-keeping, and four of the five hottest months on record have occurred in 2015. Because of the El Nino phenomenon, researchers now think above-average temperatures will continue through the spring of 2016. One clear impact will be ongoing and profound droughts in places like  California and Australia. As a result, sales of irrigation equipment should see strong support well into the future. Infrastructure Is A Ticking Time Bomb Sluggish global growth and lingering problems from the financial crisis have put off needed infrastructure projects around… Read More

As an economist for the state of Iowa, I learned that economic stimulus can affect growth — but only if given time to work. Of course, patience is not something investors or the markets are known for.  The lagging nature of stimulus on the economy can be excruciating for those with a stake, especially when the market wants instant gratification. This often manifests in whipsaws, where stock prices jump on news of economic stimulus, only to fall when the stimulus doesn’t come through in immediate economic growth. With this in mind, and with a little patience, you can make good… Read More

As an economist for the state of Iowa, I learned that economic stimulus can affect growth — but only if given time to work. Of course, patience is not something investors or the markets are known for.  The lagging nature of stimulus on the economy can be excruciating for those with a stake, especially when the market wants instant gratification. This often manifests in whipsaws, where stock prices jump on news of economic stimulus, only to fall when the stimulus doesn’t come through in immediate economic growth. With this in mind, and with a little patience, you can make good money as the rest of the market misses out on the bigger picture.  #-ad_banner-# For instance, a surge in stimulus measures in one country may soon jumpstart its economy. As a result, a key trading partner could see its market jump as well. Plus, Warren Buffett has taken an interest in this beaten-down market. And one of my favorite strategies offers a chance to get paid while we wait for a rebound.  China Ramps Up Stimulus Measures As of July 8, the Hang Seng index in Hong Kong had plummeted 14% in just a month… Read More