For the companies that own cellphone towers, business has been brisk. American Tower Corp. (NYSE: AMT), SBA Communications Corp. (Nasdaq: SBAC) and Crown Castle International Corp. (NYSE: CCI) have generated 17%-to-22% compound annual sales growth over the past five years.   The business model is fairly simple. Each cell tower can handle equipment and traffic for as many as four or five telecom carriers and transmit a signal anywhere from 22 to 45 miles. Leases of ten years and annual rent increases of around 3% mean the towers are great cash flow machines. #-ad_banner-#As telecom carriers race to compete and… Read More

For the companies that own cellphone towers, business has been brisk. American Tower Corp. (NYSE: AMT), SBA Communications Corp. (Nasdaq: SBAC) and Crown Castle International Corp. (NYSE: CCI) have generated 17%-to-22% compound annual sales growth over the past five years.   The business model is fairly simple. Each cell tower can handle equipment and traffic for as many as four or five telecom carriers and transmit a signal anywhere from 22 to 45 miles. Leases of ten years and annual rent increases of around 3% mean the towers are great cash flow machines. #-ad_banner-#As telecom carriers race to compete and raise money selling off their tower infrastructure, they’re finding eager buyers in the tower operators. Verizon Communications, Inc. (NYSE: VZ) announced a long-term lease and sale of 11,500 towers, one of the last remaining large carrier portfolios, to American Tower in February for $5.06 billion. Since cash flows are all but certain, debt is easy to come by and tower operators are loading up to make capital investments for years to come. American Tower has more than two-thirds of its capital structure (68%) in debt and a BBB credit rating by Morningstar, just one level above non-investment grade. Crown Castle… Read More

Turnaround strategies can focus on a variety of factors. Some companies shed lagging divisions, while others pursue acquisitions to jump start growth. For John Chen, the CEO of BlackBerry Ltd. (Nasdaq: BBRY), new product development holds the key. In a recent interview at the Milken Institute Global Conference, Chen said his firm will focus on security, privacy and increasing productivity with its devices. #-ad_banner-#His comments come following a February deal with Google, Inc. (Nasdaq: GOOG) and Amazon.com, Inc. (Nasdaq: AMZN) that will bring hundreds of thousands of new applications to BlackBerry users. Is Chen planning to make more announcements that… Read More

Turnaround strategies can focus on a variety of factors. Some companies shed lagging divisions, while others pursue acquisitions to jump start growth. For John Chen, the CEO of BlackBerry Ltd. (Nasdaq: BBRY), new product development holds the key. In a recent interview at the Milken Institute Global Conference, Chen said his firm will focus on security, privacy and increasing productivity with its devices. #-ad_banner-#His comments come following a February deal with Google, Inc. (Nasdaq: GOOG) and Amazon.com, Inc. (Nasdaq: AMZN) that will bring hundreds of thousands of new applications to BlackBerry users. Is Chen planning to make more announcements that could put the Canadian smartphone company back on top? Or is it just another failed attempt to resuscitate the one-time leader in enterprise services? Chen needs a victory. BlackBerry’s shares have surged and slumped in recent years as potential buyouts, new strategies and new management failed to put the company back on track. Not long ago, BlackBerry was a market leader in the mobile enterprise services category. Now, BlackBerry’s share of the global mobile operating system (OS) market is less than 1% (compared to the 96% market share about evenly controlled by Apple iOS and Android OS devices). Read More

As the S&P 500 clings to its all-time high and investors wonder if its 21 times earnings multiple is a little pricey, one market makes it look like a bargain-basement deal. This stock market is trading for a staggering 44 times trailing earnings and has more than doubled in the past year. What’s even more perplexing is that stocks keep making fresh highs even as fundamentals continue to deteriorate. The government has taken notice though, and may soon remove the punch bowl from the party. It may not be long before a correction turns into a full-blown market… Read More

As the S&P 500 clings to its all-time high and investors wonder if its 21 times earnings multiple is a little pricey, one market makes it look like a bargain-basement deal. This stock market is trading for a staggering 44 times trailing earnings and has more than doubled in the past year. What’s even more perplexing is that stocks keep making fresh highs even as fundamentals continue to deteriorate. The government has taken notice though, and may soon remove the punch bowl from the party. It may not be long before a correction turns into a full-blown market crisis. How Quickly Sentiment Can Turn Anyone invested in the Chinese market over the past decade knows how important sentiment is to prices. After a meteoric rise and subsequent crash during the global financial crisis, things seemed to improve quickly as the Shanghai Composite recovered off its late 2008 lows.  Hopes that stock prices would surge again as the world’s second largest economy became a global powerhouse were dashed as the Shanghai Composite lost close to 40% in the five years following its 2009 high.  But then, as the government sought to cool overheating in the property market, investors found… Read More

Just a decade ago, you could throw a dart at the field of emerging market stocks for double-digit gains. Strong economic growth in the Brazil, Russia, India and China, which are considered the four dominant emerging markets, was augmented by a commodity boom, which helped resource exporters throughout the world. Even after the United States housing bubble burst, emerging markets rebounded more quickly than developed markets. The iShares MSCI Emerging Markets (NYSE: EEM) outperformed both the S&P 500 and the Vanguard FTSE Europe ETF (NYSE: VGK) by more than 32% over the… Read More

Just a decade ago, you could throw a dart at the field of emerging market stocks for double-digit gains. Strong economic growth in the Brazil, Russia, India and China, which are considered the four dominant emerging markets, was augmented by a commodity boom, which helped resource exporters throughout the world. Even after the United States housing bubble burst, emerging markets rebounded more quickly than developed markets. The iShares MSCI Emerging Markets (NYSE: EEM) outperformed both the S&P 500 and the Vanguard FTSE Europe ETF (NYSE: VGK) by more than 32% over the two years to March 2011. #-ad_banner-#​But that’s about when the music stopped. Slowing growth in China and economic stagnation in Europe has weighed on commodity prices and the recent selloff in crude oil has been the final straw for many emerging markets. Those that failed to use the good times to diversify their economy have seen the worst of the drop. Shares of the iShares MSCI Brazil Capped ETF (NYSE: EWZ) have plunged more than 20% over the last year on lower oil revenues and… Read More

Until less than a decade ago, there was no real need to address the forty-year ban on exporting crude oil from the United States. Over the 38 years to 2008, the country had seen an average annual decline of 1.7% in production and was only exporting a very small amount to Canada. That all changed with the shale drilling revolution as oil production jumped 74% to 8.68 million barrels a day over the six years through 2014. #-ad_banner-#Lifting the oil export ban in 2015 could add $1.8 trillion to our nation’s annual GDP, according to a 2014 study by NERA… Read More

Until less than a decade ago, there was no real need to address the forty-year ban on exporting crude oil from the United States. Over the 38 years to 2008, the country had seen an average annual decline of 1.7% in production and was only exporting a very small amount to Canada. That all changed with the shale drilling revolution as oil production jumped 74% to 8.68 million barrels a day over the six years through 2014. #-ad_banner-#Lifting the oil export ban in 2015 could add $1.8 trillion to our nation’s annual GDP, according to a 2014 study by NERA Economic Consulting, a nonpartisan consulting group. The resulting acceleration in economic growth could create an additional 230,000-to-380,000 jobs in the five years to 2020. With such strong benefits to the economy, why is it taking Washington so long to repeal the antiquated ban on crude exports? Besides environmentalists that argue lifting of the ban would result in higher domestic production, the fight to keep the ban in place is being fought by one industry, in particular, because it could mean disaster for its profitability. The industry may soon lose that fight and you might consider protecting your portfolio before it… Read More

For the past five years, investing in agricultural commodities has not been for the faint of heart. After rebounding quickly from the Great Recession on heavy demand from emerging markets, record harvests and slowing Chinese demand led to a general downtrend in prices, with volatile spikes in 2012 and 2014. This year, we’ve seen corn and wheat prices fall on an upgrade in production forecasts by the USDA and lowered expectations for export demand. Beyond strong expectations for this year’s harvest, a strong dollar is making U.S. crops relatively more expensive on the global market. But could this… Read More

For the past five years, investing in agricultural commodities has not been for the faint of heart. After rebounding quickly from the Great Recession on heavy demand from emerging markets, record harvests and slowing Chinese demand led to a general downtrend in prices, with volatile spikes in 2012 and 2014. This year, we’ve seen corn and wheat prices fall on an upgrade in production forecasts by the USDA and lowered expectations for export demand. Beyond strong expectations for this year’s harvest, a strong dollar is making U.S. crops relatively more expensive on the global market. But could this be a repeat of prior years when prices spiked due to higher demand or lower-than-expected supply? Beyond long-term catalysts to support prices, there are several near-term issues that could drive prices for corn and other grains higher this year.  Population Explosion Supports Grain Demand  It may have taken more than 200,000 years for the global population to reach 1 billion, but it took only 123 years to grow that number to 2 billion. In 2012, that number hit 7 billion, and the UN predicts we’ll add our next billion by 2026, a span of just 14 years. #-ad_banner-#Beyond the absolute… Read More

The global population continues to expand at a steady pace, and agronomists believe that crop yields will need to double by 2050 to meet rising food demand. That should be leading to rising demand for fertilizer producers, but these firms haven’t seen much benefit from the trend in recent years.   Blame goes to a weakening Chinese economy and lower commodity prices, which reduce farm incomes.  The knockout punch came in July 2013 when Russian potash miner Uralkali decided to abandon cartel-like pricing policies and favor sales volumes over pricing. Potash is one of the three key compounds, along with nitrogen… Read More

The global population continues to expand at a steady pace, and agronomists believe that crop yields will need to double by 2050 to meet rising food demand. That should be leading to rising demand for fertilizer producers, but these firms haven’t seen much benefit from the trend in recent years.   Blame goes to a weakening Chinese economy and lower commodity prices, which reduce farm incomes.  The knockout punch came in July 2013 when Russian potash miner Uralkali decided to abandon cartel-like pricing policies and favor sales volumes over pricing. Potash is one of the three key compounds, along with nitrogen and phosphate, in organic fertilizers. #-ad_banner-#Until that seismic event, global potash prices had been set by two trading companies: the Belarusian Potash Company and Canpotex. The former is a joint venture between Uralkali and Belaruskali. The latter is controlled by Potash Corp. of Saskatchewan, Inc. (NYSE: POT), Agrium, Inc. (NYSE: AGU) and The Mosaic Co. (NYSE: MOS). By limiting potash production, the group kept prices higher than natural supply and demand would allow. When Uralkali decided to produce at full capacity in 2013, the publicly-traded companies saw 30% of their market capitalization erased in a single… Read More

“Google” and the phrase “internet search” have become virtually synonymous. Google, Inc.’s (Nasdaq: GOOG) overwhelmingly dominant market share of web searches has helped the company to become the largest media company in the world, ranked by advertising revenue (as of 2013). The company’s projected 2015 sales of $65.8 billion mean that it will account for nearly 40% of the global digital advertising spend this year. With spending on digital advertising growing at 13% a year, well over the 3% growth in the broader marketing category, Google stands to continue posting great financial results. Its… Read More

“Google” and the phrase “internet search” have become virtually synonymous. Google, Inc.’s (Nasdaq: GOOG) overwhelmingly dominant market share of web searches has helped the company to become the largest media company in the world, ranked by advertising revenue (as of 2013). The company’s projected 2015 sales of $65.8 billion mean that it will account for nearly 40% of the global digital advertising spend this year. With spending on digital advertising growing at 13% a year, well over the 3% growth in the broader marketing category, Google stands to continue posting great financial results. Its shares trade for 25 times trailing earnings, which is not out of line with other fast-growth technology companies: If that was the entire story, then shares would be appealing. But a new patent filed by an up-and-coming competitor may mean trouble ahead. The patent applicant has already dominated one area of our virtual lives and could soon be taking huge market share from Google’s biggest money-maker. A Social Media Giant’s Strategic Advertising Plans Facebook, Inc. (Nasdaq: FB) recently filed for a patent that may underpin a lethal combination in internet data and advertising. The patent covers the use… Read More

After nearly three years of extremely weak economic growth, the European Central Bank is finally delivering on Mario Draghi’s pledge to do “whatever it takes” to get the region back on track. The central bank is set to pump $64 billion into the economy through monthly bond purchases through September 2016. The quantitative easing program, alluded to in September, formally announced in January and started on March 9, may already be having an effect on the economy in terms of sentiment.  Q4 GDP growth of 0.3% beat expectations, and manufacturing data showed signs of life in March. Exports to the… Read More

After nearly three years of extremely weak economic growth, the European Central Bank is finally delivering on Mario Draghi’s pledge to do “whatever it takes” to get the region back on track. The central bank is set to pump $64 billion into the economy through monthly bond purchases through September 2016. The quantitative easing program, alluded to in September, formally announced in January and started on March 9, may already be having an effect on the economy in terms of sentiment.  Q4 GDP growth of 0.3% beat expectations, and manufacturing data showed signs of life in March. Exports to the United States could get a big boost this year on a massive depreciation in the euro versus the U.S. dollar. All things considered, I would say it could be a very good year for European stocks, and possibly most of 2016 as well. #-ad_banner-#There is one fly in the ointment. Greece is back in the headlines as officials were said to have informally approached the IMF to delay repayment on the country’s debt but were denied. Thanos Vamvakidis, head of European G10 FX strategy at BofA Merrill Lynch Global Research, said the country may run out of money if a… Read More

#-ad_banner-#Over the past few months, the S&P 500 has traded in a narrow 80-point range, and a familiar refrain is again making the rounds: “Sell in May and go away.” That axiom highlights the seasonal underperformance that the summer months often bring. The market’s detractors are pointing to the weakest earnings expectations since the recession and calling for a correction or even a full-blown bear market.  The force of the herd may send stocks down marginally over the next few months, but several stronger forces are lining up to make this another positive year for investors.  I’ve found… Read More

#-ad_banner-#Over the past few months, the S&P 500 has traded in a narrow 80-point range, and a familiar refrain is again making the rounds: “Sell in May and go away.” That axiom highlights the seasonal underperformance that the summer months often bring. The market’s detractors are pointing to the weakest earnings expectations since the recession and calling for a correction or even a full-blown bear market.  The force of the herd may send stocks down marginally over the next few months, but several stronger forces are lining up to make this another positive year for investors.  I’ve found one way to hedge against a market correction, while still benefiting from higher prices through the end of the year. Here Come The Perma-Bears A surging dollar and plummeting oil prices are setting the market up for one of the worst earnings seasons since the recession. Earnings for companies in the S&P 500 are expected to drop by 4.6% in the first quarter compared to the same period last year. Expectations for earnings have fallen by more than 8% since the end of the fourth quarter, the largest decline in estimates since the first quarter of 2009.  The glum… Read More