Best Buy (NYSE: BBY) has been one of the toughest retailers to own over the past few years — but investors who bought BBY when there was “blood in the streets” are still up over 100%. #-ad_banner-#The key issue for Best Buy is that it’s quickly losing market share to Amazon.com (Nasdaq: AMZN). This is not unlike the majority of brick-and-mortar retailers in the U.S.  For instance, consider office-supply giant Staples (Nasdaq: SPLS), which, like Best Buy, is down about 25% this year. Staples’ problems have been twofold: The rise of e-commerce competition and the lingering… Read More

Best Buy (NYSE: BBY) has been one of the toughest retailers to own over the past few years — but investors who bought BBY when there was “blood in the streets” are still up over 100%. #-ad_banner-#The key issue for Best Buy is that it’s quickly losing market share to Amazon.com (Nasdaq: AMZN). This is not unlike the majority of brick-and-mortar retailers in the U.S.  For instance, consider office-supply giant Staples (Nasdaq: SPLS), which, like Best Buy, is down about 25% this year. Staples’ problems have been twofold: The rise of e-commerce competition and the lingering economic downturn have both weighed on its sales.  Staples missed fiscal first-quarter earnings expectations by 14%, which drove its stock down further. But after being beaten up for the past couple of years, Staples could be a turnaround story trading in deep value territory.  Shares of Best Buy went on a tear last year after the company announced a number of initiatives to transform it into an omni-channel (retail and online) leader. Trouble is, Best Buy has yet to live up to its turnaround promise and has continued to lack a strong e-commerce presence. As a result, Best Buy’s stock… Read More

Bill Ackman takes big, concentrated positions with his hedge fund Pershing Square Capital, and 2014 has been a winning year for him. According to HSBC, Pershing Square is the top-performing hedge fund this year, with a gain of 22.5%.  #-ad_banner-#Not bad for half a year’s work. Compare this to performance of his peers David Einhorn and Dan Loeb: Einhorn’s Greenlight Capital and Loeb’s Third Point hedge fund are up only 5.4% and 4% this year, respectively, compared with a 4.4% gain for the S&P 500 Index. Unlike Loeb and Einhorn, Ackman appears to be more of a dealmaker. He… Read More

Bill Ackman takes big, concentrated positions with his hedge fund Pershing Square Capital, and 2014 has been a winning year for him. According to HSBC, Pershing Square is the top-performing hedge fund this year, with a gain of 22.5%.  #-ad_banner-#Not bad for half a year’s work. Compare this to performance of his peers David Einhorn and Dan Loeb: Einhorn’s Greenlight Capital and Loeb’s Third Point hedge fund are up only 5.4% and 4% this year, respectively, compared with a 4.4% gain for the S&P 500 Index. Unlike Loeb and Einhorn, Ackman appears to be more of a dealmaker. He likes to get his hands dirty, providing not only money but also strategy. His most successful deal was Canadian Pacific Railway (NYSE: CP), where he launched a proxy contest and replaced the board and directors and the CEO. Ackman was instrumental in bringing former CEO Hunter Harrison out of retirement, and the results speak for themselves. He tripled his $1 billion investment in the company in under three years. In Ackman’s latest deal, he has teamed up with Martin Franklin, chairman of Jarden (NYSE: JAH), and billionaire Nicolas Berggruen in Platform Specialty Products (NYSE: PAH). Platform Specialty was formed after… Read More

Back during the gold rush of the 1800s, there were two ways to make money…  #-ad_banner-#You could mine for gold yourself — or you could sell the picks and shovels the miners needed.  The companies that made and sold the picks and shovels often proved much better investments than speculating on the gold mines themselves. Fast-forward a few decades, to the Texas oil boom, and the adage proved true again — especially for Howard Hughes.  Hughes realized that the real money was in making the drillbits used in drilling for oil rather than actually drilling for… Read More

Back during the gold rush of the 1800s, there were two ways to make money…  #-ad_banner-#You could mine for gold yourself — or you could sell the picks and shovels the miners needed.  The companies that made and sold the picks and shovels often proved much better investments than speculating on the gold mines themselves. Fast-forward a few decades, to the Texas oil boom, and the adage proved true again — especially for Howard Hughes.  Hughes realized that the real money was in making the drillbits used in drilling for oil rather than actually drilling for oil. He would go on to become the richest man in the world for a time. Today, there’s a modern-day boom in farming.  The global demand for food is at levels never before seen. Global population growth and the use of crops as renewable fuels are all contributing to the demand.  What was true in the previous booms hasn’t changed — it’s often more profitable to own the materials that farmers need to grow crops rather than speculating on the crops themselves. Crops are dependent on weather, and natural disasters can wipe out a full year’s work in a matter… Read More

The modern steel industry got its start back in the 1850s and took off after the American Civil War, just as the U.S. and global economies took off. Many great fortunes were made in the steel boom. #-ad_banner-#What’s more is that to this day there is no effective alternative for steel. The biggest fortune created from steel was that of Andrew Carnegie, who famously gave away all his money to charities after his death. Today, the modern Andrew Carnegie is Lakshmi Mittal, an Indian steel magnate. Through a series of acquisitions, he built his family’s… Read More

The modern steel industry got its start back in the 1850s and took off after the American Civil War, just as the U.S. and global economies took off. Many great fortunes were made in the steel boom. #-ad_banner-#What’s more is that to this day there is no effective alternative for steel. The biggest fortune created from steel was that of Andrew Carnegie, who famously gave away all his money to charities after his death. Today, the modern Andrew Carnegie is Lakshmi Mittal, an Indian steel magnate. Through a series of acquisitions, he built his family’s steel business into the world’s largest steel company: ArcelorMittal (NYSE: MT). This company is now the best play on the global economy, since steel is used in so many industries and products, from automobiles in Detroit to skyscrapers in China.  Steel demand is everywhere — and so is ArcelorMittal. Mittal and his family are ArcelorMittal’s largest shareholders, with a 38% stake in the company. The fact that the family has a vested interest in the strength of the company ought to provide a margin of comfort to investors. Over the past few years, ArcelorMittal has been focused on reducing costs… Read More

George Soros is a macro investor: He looks at the big picture, identifies a theme… and then homes in on the best way to profit from that theme.  #-ad_banner-#His strategy involves looking at government and central bank policies, industry trends, and the economy — but one tactic that he has typically avoided is activist investing. Soros usually leaves that for the likes of Carl Icahn, Bill Ackman and Dan Loeb.  However, when Soros — with a net worth of $25 billion — decides to become a company’s largest shareholder and assume an activist role, he should not be taken lightly. … Read More

George Soros is a macro investor: He looks at the big picture, identifies a theme… and then homes in on the best way to profit from that theme.  #-ad_banner-#His strategy involves looking at government and central bank policies, industry trends, and the economy — but one tactic that he has typically avoided is activist investing. Soros usually leaves that for the likes of Carl Icahn, Bill Ackman and Dan Loeb.  However, when Soros — with a net worth of $25 billion — decides to become a company’s largest shareholder and assume an activist role, he should not be taken lightly.  Soros has taken on just such a role with Penn Virginia (NYSE: PVA).  Over the years, Penn Virginia has shifted from being a pure natural gas company to one focused on oil and higher-value natural gas liquids. The company remains one of the best-positioned companies in the Eagle Ford shale formation in South Texas. Soros became Penn Virginia’s largest shareholder in the first quarter of this year after disclosing a position of just over 9% in the company. The interesting part is what Soros said in his SEC filing. Where most activists go after management, Soros… Read More

Following the moves of billionaire investors can be a great strategy — if you do it prudently.  #-ad_banner-#Many of the great money managers run concentrated portfolios, with the majority of their fund invested in a small number of stocks. That means these managers usually have a high degree of conviction when it comes to their picks.  One such fund is activist hedge fund Third Point, which Daniel Loeb founded in 1995. His $14 billion flagship fund returned 25% last year, and its success over the past couple of years has been driven by major investments in Yahoo (Nasdaq:… Read More

Following the moves of billionaire investors can be a great strategy — if you do it prudently.  #-ad_banner-#Many of the great money managers run concentrated portfolios, with the majority of their fund invested in a small number of stocks. That means these managers usually have a high degree of conviction when it comes to their picks.  One such fund is activist hedge fund Third Point, which Daniel Loeb founded in 1995. His $14 billion flagship fund returned 25% last year, and its success over the past couple of years has been driven by major investments in Yahoo (Nasdaq: YHOO), AIG (NYSE: AIG) and Delphi Automotive (NYSE: DLPH). During this year’s first quarter, Loeb and Third Point bought 2.5 million shares of drugmaker Actavis (NYSE: ACT), making it the hedge fund’s largest holding.  Actavis develops and manufactures branded and generic drugs, with a focus on urology and women’s health. Its generic drug portfolio should benefit from a shift toward cost-effective health care.  Actavis has been on an acquisition spree, which should help the company deliver an earnings growth rate in the high teens over the next few years. In less than two years, Actavis has already closed two acquisitions… Read More

Whenever there is a bidding war on Wall Street, one company emerges as the victor, with the loser forced to regroup. Typically, the loser will then look for a consolation prize: another company in the same industry. #-ad_banner-#This could be what happens next as Pilgrim’s Pride (Nasdaq: PPC) and Tyson Foods (NYSE: TSN) battle over Hillshire Brands (NYSE: HSH).  Only one company can win the bidding war for Hillshire Brands. Whichever company loses will likely then go looking for its next acquisition target — but there are very few publicly traded meat producers. I expect the next target for Pilgrim’s… Read More

Whenever there is a bidding war on Wall Street, one company emerges as the victor, with the loser forced to regroup. Typically, the loser will then look for a consolation prize: another company in the same industry. #-ad_banner-#This could be what happens next as Pilgrim’s Pride (Nasdaq: PPC) and Tyson Foods (NYSE: TSN) battle over Hillshire Brands (NYSE: HSH).  Only one company can win the bidding war for Hillshire Brands. Whichever company loses will likely then go looking for its next acquisition target — but there are very few publicly traded meat producers. I expect the next target for Pilgrim’s Pride or Tyson (one of my favorite stocks) could well be Sanderson Farms (Nasdaq: SAFM), a $2.2 billion company that makes and sells chicken products in the U.S. What makes Sanderson Farms an attractive target is that in the wake of rapid consolidation in the meat producer industry, there aren’t many companies left to buy. For instance, pork producer Smithfield Farms was acquired last year by a Chinese firm for $7.1 billion to feed the growing demand for pork in China, the world’s largest consumer of pork.  One of Sanderson’s main competitors is Perdue Farms. Perdue is privately held, and… Read More

Being a contrarian investor is not easy. You will be investing on the opposite side of the majority of investors. Many people will say you’re wrong.  #-ad_banner-#However, some of the market’s greatest investors are contrarians. These include the likes of Jim Rogers, George Soros and Howard Marks, who all believe in going against the grain when it comes to investing.  So how do you find stocks that the broader market hates?  The easiest way is to look at which stocks have a high short interest. Investors might be short for any number of reasons, but if the… Read More

Being a contrarian investor is not easy. You will be investing on the opposite side of the majority of investors. Many people will say you’re wrong.  #-ad_banner-#However, some of the market’s greatest investors are contrarians. These include the likes of Jim Rogers, George Soros and Howard Marks, who all believe in going against the grain when it comes to investing.  So how do you find stocks that the broader market hates?  The easiest way is to look at which stocks have a high short interest. Investors might be short for any number of reasons, but if the company starts showing signs of strength, shorts will begin abandoning their positions.  That is because the potential loss for short sellers is unlimited — there’s no telling how high a stock can go. Once a stock starts ticking higher, a short squeeze can ensue when short sellers start covering their positions, which can in turn drive the stock even higher.  I’ve identified five stocks that have a relatively high short interest, but they also appear to be trading at valuations that might be attractive for deep value investors. 1. Conn’s (Nasdaq: CONN ) Short interest: 32%​ Shares of… Read More

Finding investment ideas is never an easy task. Hedge funds, with their manpower and access to research, outgun individual investors. Some of the greatest minds in the market also run many of these hedge funds.  #-ad_banner-#These include the likes of billionaire gurus Warren Buffett, Carl Icahn and Dan Loeb. Each quarter we get a glimpse into what the greats are buying. Funds managing over $100 million must file a Form 13F with the SEC. These filings come up to 45 days after the end of the quarter, but investors can still use them to find new ideas for… Read More

Finding investment ideas is never an easy task. Hedge funds, with their manpower and access to research, outgun individual investors. Some of the greatest minds in the market also run many of these hedge funds.  #-ad_banner-#These include the likes of billionaire gurus Warren Buffett, Carl Icahn and Dan Loeb. Each quarter we get a glimpse into what the greats are buying. Funds managing over $100 million must file a Form 13F with the SEC. These filings come up to 45 days after the end of the quarter, but investors can still use them to find new ideas for their own portfolios.  As far as stocks that the billionaires are buying, it is always a positive sign if more than one major hedge fund is buying the stock. Below are three stocks that saw some of the greatest interest among top hedge funds. First up is emerging e-commerce giant eBay (Nasdaq: EBAY), which had seven hedge funds added to their portfolios. The most notable buyers included Icahn, activist fund Jana Partners and Tiger Consumer Management.  Icahn tried to convince eBay to spin off PayPal. (My colleague Tim Begany took at look at this story last month.) After a bit… Read More

Rodney Dangerfield said it best in the movie “Caddyshack” when he was talking to his broker while playing golf.  #-ad_banner-#”Buy, buy, buy! Oh, everyone’s buying? Then sell, sell, sell!”  The quick lesson from this is many times it is best to not follow the crowd. Instead, do the opposite — and history shows that times of crisis have proven to be some of the best times to invest.  Right now, the market everyone is selling is Russia, driven by its incursions in Ukraine. Some of the hardest-hit stocks include VimpelCom (Nasdaq: VIP), Yandex (Nasdaq:… Read More

Rodney Dangerfield said it best in the movie “Caddyshack” when he was talking to his broker while playing golf.  #-ad_banner-#”Buy, buy, buy! Oh, everyone’s buying? Then sell, sell, sell!”  The quick lesson from this is many times it is best to not follow the crowd. Instead, do the opposite — and history shows that times of crisis have proven to be some of the best times to invest.  Right now, the market everyone is selling is Russia, driven by its incursions in Ukraine. Some of the hardest-hit stocks include VimpelCom (Nasdaq: VIP), Yandex (Nasdaq: YNDX) and Gazprom (OTC: OGZPY).  VimpelCom is down 36% year to date. Yandex is down 24% and Gazprom is down almost 5%. Are they worth buying on this pullback? Let’s take a closer look The Best Russian Telecom To Own VimpelCom is a leading telecom in Russia, Ukraine and many other parts of the former Soviet Union. In Russia, VimpelCom owns the #3 carrier, and in Ukraine, it owns the largest, Kyivstar. In total, the company has more than 218 million mobile subscribers.  Over the last four years, VimpelCom has sought to lessen its reliance on Russia as it… Read More