Warren Buffett’s investing strategy is simple: find companies worth investing in forever. Buffett has been quoted as saying he likes to buy stock in businesses that are, “so wonderful an idiot can run them.”  On paper it seems like a simple enough strategy. But for value investors, trying to imitate the world’s third-richest man (with a net worth of $72.7 billion) can lead to a pretty steep price tag.  Let me explain. Take a look at the top five stocks in Warren Buffett’s portfolio through his holding company Berkshire Hathaway, Inc. (NYSE: BRK-A). Each company, and the industry… Read More

Warren Buffett’s investing strategy is simple: find companies worth investing in forever. Buffett has been quoted as saying he likes to buy stock in businesses that are, “so wonderful an idiot can run them.”  On paper it seems like a simple enough strategy. But for value investors, trying to imitate the world’s third-richest man (with a net worth of $72.7 billion) can lead to a pretty steep price tag.  Let me explain. Take a look at the top five stocks in Warren Buffett’s portfolio through his holding company Berkshire Hathaway, Inc. (NYSE: BRK-A). Each company, and the industry they operate it, is easily recognizable. Here’s the problem though: Buffett’s popularity and well-known admiration for each of these stocks has led to fairly high valuations. I came to this conclusion by looking at the five-year price/earnings-to-growth, or PEG, ratio of each of these stocks. A PEG ratio takes into account a company’s current price-to-earnings ratio in relation to its projected earnings growth over the next five years. A ratio near or below one is considered fair value and greater than one is overvalued. Buffett’s top five holdings generated a ratio of 2.5. That… Read More

#-ad_banner-#There are 253 million cars and trucks driving along U.S. roads. And the average age of those automobiles is roughly 11.4 years old, according to a recent study by IHS Automotive, a leading auto industry research firm.  That bodes well for companies offering replacement parts and services on the population’s aging vehicles. And growth investors buying shares of these companies have reaped serious rewards in the past.  But if you’re an income investor, then you may have noticed that the biggest players in the industry don’t exactly offer much of what you’re looking for.  Leading firms Advance Auto Parts, Inc. Read More

#-ad_banner-#There are 253 million cars and trucks driving along U.S. roads. And the average age of those automobiles is roughly 11.4 years old, according to a recent study by IHS Automotive, a leading auto industry research firm.  That bodes well for companies offering replacement parts and services on the population’s aging vehicles. And growth investors buying shares of these companies have reaped serious rewards in the past.  But if you’re an income investor, then you may have noticed that the biggest players in the industry don’t exactly offer much of what you’re looking for.  Leading firms Advance Auto Parts, Inc. (NYSE: AAP) and AutoZone, Inc. (NYSE: AZO) offer close to nothing in the way of dividend yields — 0.2% and 0.0%, respectively.  Genuine Parts Co. (NYSE: GPC), however, which sells its parts and accessory items through more than 6,000 NAPA Auto Parts stores nationwide, pays a healthy 2.6% dividend yield.  Now I know what you’re thinking: a 2.6% yield is nothing to write home about. But as history as shown, shareholders of this company can expect that dividend to keep growing.  That’s because GPC is a member of a group of top dividend payers known as the Dividend Aristocrats. These… Read More

Thanks to two mega trends sweeping the United States, the home improvement market is exploding in popularity all across the country. #-ad_banner-#With Americans beginning to rely more heavily on cost-savings options and push for greater sustainability, do-it-yourself (or DIY) projects have never been more popular. In 2014, the U.S. home improvement products market was worth an estimated $313.5 billion, up 5.9% from the prior year, according to market statistics firm Statista. Many investors would see this as a time to run out and buy shares of  big box-store company’s like Home Depot or Lowe’s. But with the two giants battling… Read More

Thanks to two mega trends sweeping the United States, the home improvement market is exploding in popularity all across the country. #-ad_banner-#With Americans beginning to rely more heavily on cost-savings options and push for greater sustainability, do-it-yourself (or DIY) projects have never been more popular. In 2014, the U.S. home improvement products market was worth an estimated $313.5 billion, up 5.9% from the prior year, according to market statistics firm Statista. Many investors would see this as a time to run out and buy shares of  big box-store company’s like Home Depot or Lowe’s. But with the two giants battling over home-improvement supremacy, there’s no telling which powerhouse retailer will ever come out on top. So instead, I’ve found three companies profiting from the DIY trend in a huge way. And these market-beaters have all the fundamentals necessary to keep showering you with big returns for years to come. The Sherwin-Williams Co. (NYSE: SHW) Sherwin-Williams is the largest producer of paints and coatings in the United States and the third largest in the world. The company estimates that more than 90% of the U.S. population lives within a 50 mile radius of one of its 3,654 domestic locations. While… Read More

The name Bill Ackman carries more weight now than it did a year ago. #-ad_banner-#2014 was a rough year for most hedge fund managers. The average fund returned just 2% and the first six months of the year saw 461 hedge funds close shop. Yet Ackman’s fund, Pershing Square Holdings, returned an astounding 40.4% in 2014 and went from managing around $11.5 billion assets at the start of the year to more than $18 billion currently. Ackman was named top dog in Bloomberg’s 2014 ranking of the world’s best hedge fund managers. And that success helped make Pershing Square Holdings’… Read More

The name Bill Ackman carries more weight now than it did a year ago. #-ad_banner-#2014 was a rough year for most hedge fund managers. The average fund returned just 2% and the first six months of the year saw 461 hedge funds close shop. Yet Ackman’s fund, Pershing Square Holdings, returned an astounding 40.4% in 2014 and went from managing around $11.5 billion assets at the start of the year to more than $18 billion currently. Ackman was named top dog in Bloomberg’s 2014 ranking of the world’s best hedge fund managers. And that success helped make Pershing Square Holdings’ (AMS: PSH) recent IPO that much more successful. The firm’s October IPO — which opened on the Euronext Amsterdam exchange — was one of Europe’s largest in 2014, at $2.7 billion. Investors who bought shares of the company at the time of its IPO have already seen a nice 12.7% gain in just a few months.   In the company’s first letter-to-shareholders, Ackman laid out what he believes to be the company’s primary competitive advantages. He wrote, “When compared with other investment holding or operating companies, PSH benefits by its favorable tax structure and long-term track record.” Pershing… Read More

$15 billion. That’s how much identity fraud costs the credit card industry each year. Sadly, more than half of that fraud occurs in the United States alone. #-ad_banner-#But Apple’s new mobile payment service, Apple Pay, is looking to greatly reduce credit card fraud by removing many of the risks associated with traditional payment systems. Consumers who use their iPhones to make purchases will be protected on various levels. First, credit card numbers will not be stored on devices. Instead, each phone will be assigned its own unique device account number, which will not be recorded on Apple servers. Next,… Read More

$15 billion. That’s how much identity fraud costs the credit card industry each year. Sadly, more than half of that fraud occurs in the United States alone. #-ad_banner-#But Apple’s new mobile payment service, Apple Pay, is looking to greatly reduce credit card fraud by removing many of the risks associated with traditional payment systems. Consumers who use their iPhones to make purchases will be protected on various levels. First, credit card numbers will not be stored on devices. Instead, each phone will be assigned its own unique device account number, which will not be recorded on Apple servers. Next, fingerprint verification will be required to initiate purchases and a one-time security code will be issued that relays the purchase data to Apple for processing.These codes will be meaningless to hackers. Questions, like to what degree credit card information stored on Apple’s servers will be secure from hackers, still need to be answered. But Apple’s new technology is still a step in the right direction toward decreasing the prevalence and magnitude of credit card fraud each year. And although Apple Pay has been endorsed by major credit and debit card firms, top U.S. banks and many popular retailers, not all… Read More

There’s an expression that goes, “the higher the risk, the higher the reward.” For example, some see risky micro-caps as one of the only ways to reap rapid big gains in a stock. Well, what if you could get the big reward, without having to take on enormous risk? It’s not easy, but it’s not impossible either. #-ad_banner-#In fact, in his Top 10 Stocks newsletter, my colleague Dave Forest recently discussed the qualities that he looks for when in search of up-and-coming winners. Dave wrote: “The qualities that make businesses great inevitably come down to a few basic themes —… Read More

There’s an expression that goes, “the higher the risk, the higher the reward.” For example, some see risky micro-caps as one of the only ways to reap rapid big gains in a stock. Well, what if you could get the big reward, without having to take on enormous risk? It’s not easy, but it’s not impossible either. #-ad_banner-#In fact, in his Top 10 Stocks newsletter, my colleague Dave Forest recently discussed the qualities that he looks for when in search of up-and-coming winners. Dave wrote: “The qualities that make businesses great inevitably come down to a few basic themes — the kind of check-list items that we can reliably look for in stocks both famous and completely unknown, to determine whether they might suddenly deliver outperformance…” Dave pointed out six basic themes that, when all are possessed by a company, make it a “must-buy.” The first step to finding the right company is to focus on firms that aren’t too big or too small. Obscure startups — with micro-sized market caps — can generate innovative ideas, but often have shaky financials due to their nature as a young business. At the other end of the spectrum, industry giants can offer… Read More

I’ve done it. I’ve found a stock so impressive I actually want to own it forever. It’s not any of the usual suspects like Apple, Google, or Starbucks. #-ad_banner-#No, the company behind this brand traces its roots back 120 years to 1894. It made more than 3 billion units of its product for the military during World War II. Some of it was even sent to the moon with the Apollo astronauts. It’s one of the most storied, iconic brands in American history… and it holds a massive 44.5% share of its market to this very day.  Figured it out… Read More

I’ve done it. I’ve found a stock so impressive I actually want to own it forever. It’s not any of the usual suspects like Apple, Google, or Starbucks. #-ad_banner-#No, the company behind this brand traces its roots back 120 years to 1894. It made more than 3 billion units of its product for the military during World War II. Some of it was even sent to the moon with the Apollo astronauts. It’s one of the most storied, iconic brands in American history… and it holds a massive 44.5% share of its market to this very day.  Figured it out yet? Here’s one more clue… The company makes a product so addictive that its factories have to produce more than 80 million units every single day just to keep up with consumers’ constant demand. The products I’m talking about are those iconic Hershey’s Kisses, and the company I want to hold forever is, of course, Hershey. The Hershey Company (NYSE: HSY) is the leading manufacturer of chocolate and non-chocolate confectionary, as well as all chocolate-related grocery products in North America. Additionally, the company carries a strong international presence with operations in more than 90 countries worldwide. Over its history, Hershey… Read More

As a financial writer, I spend many hours a week looking through newspapers, online publications and television newscasts for clues about the direction of the markets and the most lucrative means for investors to capitalize on that knowledge. #-ad_banner-#Early this week, I had an epiphany: a major trend was right in my face — not in what I was finding, but in how I was doing my research.  Though I try to use all media sources to my advantage, the truth is I do about 90% of my research digitally. And I’m not alone — these days more people rely… Read More

As a financial writer, I spend many hours a week looking through newspapers, online publications and television newscasts for clues about the direction of the markets and the most lucrative means for investors to capitalize on that knowledge. #-ad_banner-#Early this week, I had an epiphany: a major trend was right in my face — not in what I was finding, but in how I was doing my research.  Though I try to use all media sources to my advantage, the truth is I do about 90% of my research digitally. And I’m not alone — these days more people rely on the internet than print publications for news and information.  Media and entertainment companies like Time Warner Inc. (NYSE: TWX) and News Corp. (Nasdaq: NWS) have taken notice and are spinning off their publishing businesses. The aim is to keep profits from their broadcasting and digital ventures shielded from declining print sales.   And as you’ll see, both moves proved to be great opportunities for savvy investors who bought in before the spin-offs.  In June 2013, News Corp. investors finally convinced  Rupert Murdoch to split the company’s publishing unit from its entertainment business. The publishing holdings, such as the Wall Street Journal… Read More

If you haven’t noticed, consumers are spending a lot. In fact, they’re spending at a record rate. In Q2 2014 alone, domestic consumer spending exceeded a whopping $10.9 trillion — an all-time high, according to a report by the U.S. Bureau of Economic Analysis. And the U.S. consumer confidence rating is up to 84.6 — just off from last year’s record high of 85.10. Where is all of that money being spent? Everywhere, it seems. A recent Gallup poll shows that while over  50% of… Read More

If you haven’t noticed, consumers are spending a lot. In fact, they’re spending at a record rate. In Q2 2014 alone, domestic consumer spending exceeded a whopping $10.9 trillion — an all-time high, according to a report by the U.S. Bureau of Economic Analysis. And the U.S. consumer confidence rating is up to 84.6 — just off from last year’s record high of 85.10. Where is all of that money being spent? Everywhere, it seems. A recent Gallup poll shows that while over  50% of consumers are spending more money on necessities like gas and groceries, over 25% are still spending more on discretionary purchases, like new clothing, vacations and dining out. Naturally, companies are clamoring to get their share of this record-setting spending spree. But with such a diverse variety of consumer habits and desires, it can be difficult to pinpoint which retailer, manufacturer or restaurant will come out on top. So, it seems, the obvious winners will be the companies that make the consumer spending possible — the firms that supply the two credit cards on average that U.S. Read More

It’s hard to be a consumer these days. We want to buy the best brands, but we don’t want to support companies that waste natural resources or pollute the Earth. We want to find the lowest priced options, but we don’t want to back companies that pay pennies on the dollar to outsourced workers in impoverished countries. #-ad_banner-#​More than ever, buyers are focusing on the social responsibility of companies — and this trend towards guilt-free consumption is changing how consumers view their purchasing habits. From donating shares of corporate profits and promoting sustainable products to offering… Read More

It’s hard to be a consumer these days. We want to buy the best brands, but we don’t want to support companies that waste natural resources or pollute the Earth. We want to find the lowest priced options, but we don’t want to back companies that pay pennies on the dollar to outsourced workers in impoverished countries. #-ad_banner-#​More than ever, buyers are focusing on the social responsibility of companies — and this trend towards guilt-free consumption is changing how consumers view their purchasing habits. From donating shares of corporate profits and promoting sustainable products to offering equal employment rights to people of all genders, ethnicities and sexual orientations, the correlation between strong earnings and corporate social responsibility has never been higher. For like minded investors, an obvious play might be to invest in individual companies, but that approach may open your portfolio to unnecessary risk. Take Tesla Motors, Inc. (Nasdaq: TSLA) for example. It’s no wonder why consumers consider a company like Tesla a breath of fresh air — not only does it offer an innovative, new product, but the company’s vehicles are designed with global preservation in… Read More