The S&P 500 is almost exactly where it was one year ago. But fortunately, it took a bumpy path to get back to this point. Corrections in August and January, and milder but significant selloffs in September, November and February, created ample buying opportunities for attractive stocks — and we were happy to take advantage. Let’s take a look at some of our winners to see whether they remain worthwhile buy candidates, or if holding or taking profits makes more sense. #-ad_banner-#​Arotech (Nasdaq: ARTX) is up about 50% since I recommended it on Dec. 17. The specialty defense contractor makes… Read More

The S&P 500 is almost exactly where it was one year ago. But fortunately, it took a bumpy path to get back to this point. Corrections in August and January, and milder but significant selloffs in September, November and February, created ample buying opportunities for attractive stocks — and we were happy to take advantage. Let’s take a look at some of our winners to see whether they remain worthwhile buy candidates, or if holding or taking profits makes more sense. #-ad_banner-#​Arotech (Nasdaq: ARTX) is up about 50% since I recommended it on Dec. 17. The specialty defense contractor makes simulators, trainers and high-performance batteries for aviation and marine use. Its customers include U.S. and foreign military and homeland security forces. As I wrote in December, the U.S. defense budget is on the rise, thanks to a rare bipartisan agreement between Congress and the White House that loosened the purse strings after a few years of austerity. Arotech’s innovative products are on the shopping lists of every military procurement strategist, as they provide next-generation capabilities of use in modern conflicts. For example, Arotech is the supplier for the U.S. Army’s SWIPES program (Soldier Worn Integrated Power Equipment Systems), which give… Read More

Some investors look for capital appreciation; others are focused more on income. But one of the smartest ways to invest is to combine both of these goals in a single stock. A growth and income strategy leads to undervalued stocks of companies that generate a lot of cash — exactly the kind of investment favored by such legendary investors as Warren Buffett. #-ad_banner-#The problem is that the highest-quality companies rarely trade at cheap valuations. That doesn’t mean they can’t deliver capital appreciation; in fact, over time they often do. But you get more bang for your buck when… Read More

Some investors look for capital appreciation; others are focused more on income. But one of the smartest ways to invest is to combine both of these goals in a single stock. A growth and income strategy leads to undervalued stocks of companies that generate a lot of cash — exactly the kind of investment favored by such legendary investors as Warren Buffett. #-ad_banner-#The problem is that the highest-quality companies rarely trade at cheap valuations. That doesn’t mean they can’t deliver capital appreciation; in fact, over time they often do. But you get more bang for your buck when you buy a stock at a below-average valuation. So it’s useful to look for companies that are high quality but somewhat out of favor temporarily. Maybe they’re in a sector that is expected to face headwinds in the near future, or they’re constrained in the short run by high debt or regulatory uncertainty. Whatever the reason, their low valuation can be an opportunity to pick up shares that stand a good chance of paying off big over time. Today, let’s look at two companies that are trading at attractive valuations while also paying out generous dividend yields. Ford Motor (NYSE:… Read More

When people around the world want something to eat, there’s a good chance they reach for a  product made by Kraft Heinz. And for investors looking for a combination of value and quality, Kraft Heinz (Nasdaq: KHC) should be on your menu right now. #-ad_banner-#Formed by the mega-merger of Kraft Foods Group and H.J. Heinz in July 2015, Kraft Heinz is the third largest food and beverage company in North America, and the fifth largest in the world. The company boasts more than 200 brands, including Kraft, Heinz, Oscar Mayer, Jell-O, Kool-Aid, and Lunchables. Eight of the company’s brands… Read More

When people around the world want something to eat, there’s a good chance they reach for a  product made by Kraft Heinz. And for investors looking for a combination of value and quality, Kraft Heinz (Nasdaq: KHC) should be on your menu right now. #-ad_banner-#Formed by the mega-merger of Kraft Foods Group and H.J. Heinz in July 2015, Kraft Heinz is the third largest food and beverage company in North America, and the fifth largest in the world. The company boasts more than 200 brands, including Kraft, Heinz, Oscar Mayer, Jell-O, Kool-Aid, and Lunchables. Eight of the company’s brands each generate $1 billion a year in sales, and the combined company’s overall revenue was $27.4 billion in 2015. Kraft Heinz sells products in dozens of countries around the world, but the United States accounts for just over 70% of earnings, with the rest focused in Canada, Europe and Latin America. That’s a big plus, because it implies that the company has room to grow by increasing market share overseas. (Some of this expansion may take a few years, because of noncompete agreements made with former Kraft sibling Mondelez when the companies split.) Strong brands don’t guarantee a string of… Read More

Last week, I looked at stocks that could be worth buying if the Federal Reserve raises interest rates in June. Since then, Fed Chair Janet Yellen confirmed that a rate hike is likely this summer, either in June or July. Fed economists’ view that the economy is picking up steam got some validation this week when U.S. consumer spending rose 1% in April, the largest percentage in more than six years. Personal income was up 0.4% and wages rose 0.5% — both signs that American households will continue to have more money to spend in the coming months. As I’ve… Read More

Last week, I looked at stocks that could be worth buying if the Federal Reserve raises interest rates in June. Since then, Fed Chair Janet Yellen confirmed that a rate hike is likely this summer, either in June or July. Fed economists’ view that the economy is picking up steam got some validation this week when U.S. consumer spending rose 1% in April, the largest percentage in more than six years. Personal income was up 0.4% and wages rose 0.5% — both signs that American households will continue to have more money to spend in the coming months. As I’ve written in recent months, consumer durable stocks should benefit from this trend. Another area that should thrive in a low-unemployment, rising-wage environment is the housing market. Indeed, home sales have shown signs of picking up in recent months as the sector’s long, slow recovery from the financial crisis continues. #-ad_banner-#Stocks associated with home sales, such as homebuilders, should be hurt by rising mortgage rates, but often are helped in the short run, as home buyers move to lock in existing rates before the Fed decides on additional rate hikes. That’s especially likely in the current environment, as consumers with cash… Read More

It became clear late last year that the Federal Reserve intended to finally raise short-term interest rates, which it had kept near zero for years to allow the economy to recover from the financial crisis. Years into recovery, with unemployment low and some signs of inflation pressure, the Fed felt that rates could move slightly higher, while remaining historically low. The first hike came in December, and most analysts expected two to three additional increases in 2016. But so far, no hikes have been announced this year. Weak economies abroad, continued rock-bottom energy prices and iffy corporate earnings all suggested… Read More

It became clear late last year that the Federal Reserve intended to finally raise short-term interest rates, which it had kept near zero for years to allow the economy to recover from the financial crisis. Years into recovery, with unemployment low and some signs of inflation pressure, the Fed felt that rates could move slightly higher, while remaining historically low. The first hike came in December, and most analysts expected two to three additional increases in 2016. But so far, no hikes have been announced this year. Weak economies abroad, continued rock-bottom energy prices and iffy corporate earnings all suggested that inflationary pressure was not a concern.  #-ad_banner-#But many Fed watchers now predict a mid-year increase when the Fed’s policy committee meets in June, and Fed leaders have started telegraphing the possibility of a 25-basis-point hike (0.25 percentage points) at that meeting. With the economy continuing to grow, unemployment remaining low and other economic indicators positive, it seems likely that rates will go up, as the Fed seeks to balance the need to tamp down on inflation with the need to help the economy continue to expand. And the Fed historically has been reluctant to raise rates in the months… Read More

The economic trends we saw developing earlier this year have continued, albeit with a little turbulence here and there: U.S. job creation remains solid, unemployment remains low and consumer incomes are rising. While the drag from economic woes in Europe and Asia is a concern, and any economy that relies on the energy industry is hurting (including ours, in part), for the most part American consumers are in better shape than they’ve been in years. Meanwhile, the inexorable aging of America is fueling growth for any provider of goods and services to older Americans. While healthcare is the obvious beneficiary,… Read More

The economic trends we saw developing earlier this year have continued, albeit with a little turbulence here and there: U.S. job creation remains solid, unemployment remains low and consumer incomes are rising. While the drag from economic woes in Europe and Asia is a concern, and any economy that relies on the energy industry is hurting (including ours, in part), for the most part American consumers are in better shape than they’ve been in years. Meanwhile, the inexorable aging of America is fueling growth for any provider of goods and services to older Americans. While healthcare is the obvious beneficiary, so is leisure: companies that profit from more spending on travel, dining, recreation and, well, fun. And few companies fit the bill better than the cruise ship lines. #-ad_banner-#The cruise industry has already grown rapidly in recent decades — passenger volume has risen at a compound annualized growth rate of about 7% over the past 35 years. And while most U.S. cruises still start in Florida, California or New York, the number of ports in use is expanding; in North America, more than 30 embarkation ports have been established, which puts a port within reasonable driving distance of 75% of… Read More

You’ve seen the headlines. At least once a month, there’s news of a medical breakthrough that promises to extend the lives of terminally ill cancer patients, reduce suffering for people with serious illnesses or improve recovery times for folks who have surgery. #-ad_banner-#The miracles of medical science have become so commonplace that we take them for granted. These enormous advances have extended average lifespans and made centenarians commonplace. In fact, some people live well beyond 100: I just read that exactly one person born in the 19th century is still alive. (Think of the stories she could tell, or the… Read More

You’ve seen the headlines. At least once a month, there’s news of a medical breakthrough that promises to extend the lives of terminally ill cancer patients, reduce suffering for people with serious illnesses or improve recovery times for folks who have surgery. #-ad_banner-#The miracles of medical science have become so commonplace that we take them for granted. These enormous advances have extended average lifespans and made centenarians commonplace. In fact, some people live well beyond 100: I just read that exactly one person born in the 19th century is still alive. (Think of the stories she could tell, or the stocks she could have bought and held since then!) Medical miracles aren’t the only phenomenon we take for granted when it comes to healthcare. Even though most investors are familiar with the “aging of America” theme — the Baby Boom generation’s slow and steady advancement into its golden years — the scope of it is easy to overlook. Let’s revisit the facts: by 2050, the population aged 65 or older will be an estimated 84 million, vs. 43.1 million in 2012. The population of Americans 85 or older will be an estimated 18 million by 2050, vs. 5.9 million in… Read More

In the second week of January, U.S. stocks were in freefall — on their way to one of the worst Januarys ever. But as I advised at the time, the selloff created buying opportunities for many excellent stocks that investors were punishing unfairly. I didn’t see a bear market starting then, and even though the correction continued for a couple more weeks, it ended and was followed by a solid recovery. For the year to date, the S&P 500 is now in slightly positive territory. I also advised that “certain stocks are buy-and-hold candidates whenever they’re relatively cheap: large, financially… Read More

In the second week of January, U.S. stocks were in freefall — on their way to one of the worst Januarys ever. But as I advised at the time, the selloff created buying opportunities for many excellent stocks that investors were punishing unfairly. I didn’t see a bear market starting then, and even though the correction continued for a couple more weeks, it ended and was followed by a solid recovery. For the year to date, the S&P 500 is now in slightly positive territory. I also advised that “certain stocks are buy-and-hold candidates whenever they’re relatively cheap: large, financially strong companies with established brands and commanding shares in growing markets.”  That’s still true today. #-ad_banner-#So let’s take a look at the true blues I profiled back in January and see if they’re still worth holding — or buying — now.  3M (NYSE: MMM) is a household name with products found in every home and office in the country — and in much of the rest of the world as well. Known for iconic brands like Scotch and Post-it, 3M makes a mind-boggling 55,000-plus products aimed at consumers, businesses and everyone in between, generating more than $30 billion in… Read More

“Buy American” isn’t only an admonition in support of U.S. manufacturers. In recent years, it’s also been the best advice for stock investors. U.S. stocks have radically outperformed shares of non-U.S. companies, driven by the superior performance of the U.S. economy relative to Europe, as well as our diversification relative to energy-heavy markets such as Canada’s and Russia’s. Even the once-soaring BRIC markets have suffered of late, as the rate of economic growth in China, India and Brazil has slowed considerably, with storm clouds on the horizon. #-ad_banner-#The numbers tell the story: for the three years ended April 30, the… Read More

“Buy American” isn’t only an admonition in support of U.S. manufacturers. In recent years, it’s also been the best advice for stock investors. U.S. stocks have radically outperformed shares of non-U.S. companies, driven by the superior performance of the U.S. economy relative to Europe, as well as our diversification relative to energy-heavy markets such as Canada’s and Russia’s. Even the once-soaring BRIC markets have suffered of late, as the rate of economic growth in China, India and Brazil has slowed considerably, with storm clouds on the horizon. #-ad_banner-#The numbers tell the story: for the three years ended April 30, the S&P 500 generated a total return of 39%, vs. 3.7% for the MSCI EAFE Index (EFA) of international stocks. That outperformance has dampened American investors’ enthusiasm for foreign stocks. The U.S. dollar’s strong rally during that period only reinforced the bias.  But in recent weeks the dollar has dipped, signaling that the euro and other currencies are staging a cyclical comeback. And in a larger sense, ignoring the rest of the world means writing off dozens of excellent companies — some of which do significant business in the United States. So let’s take a look at two such stocks that represent… Read More

Imagine you open a savings account and deposit $10,000. The interest rate is 2.5%, which isn’t tremendous — but you’ll take it in this low-interest-rate environment. Now imagine that every year, the interest rate rises by 0.25 percentage points: 2.75% in year two, 3% in year three, and so on. Pretty good, right? After 10 years, your account would pay you 4.75%. After 20, the interest rate is 7.25%. Lots of folks would sign up for that. #-ad_banner-#Now imagine an even better deal: instead of rising by 0.25 percentage points a year, rate goes up 10% each year — that… Read More

Imagine you open a savings account and deposit $10,000. The interest rate is 2.5%, which isn’t tremendous — but you’ll take it in this low-interest-rate environment. Now imagine that every year, the interest rate rises by 0.25 percentage points: 2.75% in year two, 3% in year three, and so on. Pretty good, right? After 10 years, your account would pay you 4.75%. After 20, the interest rate is 7.25%. Lots of folks would sign up for that. #-ad_banner-#Now imagine an even better deal: instead of rising by 0.25 percentage points a year, rate goes up 10% each year — that is, 0.25 percentage points in year one, 0.275 percentage points in year two, then0 .3025 in year three, and so on. After 10 years of this type of increase, your account would pay you 6.48%. After 20 years, you’d earn 16.8% on your deposit! This exercise is worth thinking about whenever you contemplate the value of dividend-growth stocks to a long-term portfolio. Because the latter deal — regular increases of the payout over time — is pretty much what you can expect from a high-quality company that increases its dividend year in and year out. Of course, in a savings… Read More