With thousands of stocks to choose from, and just a few hundred of them garnering most of the attention, investors often overlook some diamonds in the rough. For instance, have you ever heard Steelcase, Inc. (NYSE: SCS)? Most have not, and that’s too bad because Steelcase has been crushing the market. Its 180% gain in the past five years almost makes the S&P 500’s 85% five-year return look meager.  Steelcase has generated market-beating returns by becoming the world’s largest provider of workplace furnishings and architectural elements. Annual sales top $3 billion. That’s well ahead… Read More

With thousands of stocks to choose from, and just a few hundred of them garnering most of the attention, investors often overlook some diamonds in the rough. For instance, have you ever heard Steelcase, Inc. (NYSE: SCS)? Most have not, and that’s too bad because Steelcase has been crushing the market. Its 180% gain in the past five years almost makes the S&P 500’s 85% five-year return look meager.  Steelcase has generated market-beating returns by becoming the world’s largest provider of workplace furnishings and architectural elements. Annual sales top $3 billion. That’s well ahead of main rivals like HNI Corp. (NYSE: HNI) and Herman Miller, Inc. (NASDAQ: MLHR), which currently have annual sales of around $2 billion.  #-ad_banner-#​Steelcase’s broad product portfolio includes state-of-the-art panel-based and freestanding furniture systems, walls, workstations, lighting, desks, storage and seating. Although the firm is best known for traditional office-space components, it also markets to customers in the health care, academic and hotel/hospitality sectors. What really sets it apart is a reputation for leading the most extensive shift in office space design to occur in several decades. Management realizes work environments have become much more technology-based, team-oriented and mobile, with… Read More

  For development-stage biotechnology companies, the moment of truth eventually arrives. At some point, they must prove that key drugs show high levels of efficacy and safety in the all-important Phase III clinical trials. The stakes are sky high as the data can make or break the company.   #-ad_banner-#​Synergy Pharmaceuticals, Inc. (Nasdaq: SGYP), a small biotech firm developing a couple drugs with blockbuster potential, will be reaching that point soon. For shareholders, it could be a time of great reward or bitter disappointment. But I’m leaning toward the former.   In the second and third quarters of 2015, Synergy… Read More

  For development-stage biotechnology companies, the moment of truth eventually arrives. At some point, they must prove that key drugs show high levels of efficacy and safety in the all-important Phase III clinical trials. The stakes are sky high as the data can make or break the company.   #-ad_banner-#​Synergy Pharmaceuticals, Inc. (Nasdaq: SGYP), a small biotech firm developing a couple drugs with blockbuster potential, will be reaching that point soon. For shareholders, it could be a time of great reward or bitter disappointment. But I’m leaning toward the former.   In the second and third quarters of 2015, Synergy plans to release data from a pair of Phase III trials of its most-promising drug, plecanatide, a once-daily oral medication that could eventually be used to treat a number of gastrointestinal disorders. In these two trials, however, it’s being evaluated in chronic idiopathic constipation, a diagnosis made in cases of constipation with no identifiable cause.   Poor or inconclusive findings would be a major setback. And they’d likely trigger a huge drop in Synergy’s stock, which is already off more than 40% over the trailing twelve months.   I doubt that’ll happen, though, considering how well plecanatide has performed in… Read More

  Any company that seeks to dominate a new industry can throw off mixed signals for investors.   On the one hand, investor excitement about the open-ended growth possibilities can deliver great stock gains. But when such high-growth firms are not yet consistently profitable, which is often the case, their stocks can also be exceptionally risky.   This brings to mind SunEdison, Inc. (NYSE: SUNE), a mid-size technology company with annual revenues of $2.4 billion. Shares of SunEdison have soared more than 400% during the past three years, even though the firm lost an average of $2.56 per share in… Read More

  Any company that seeks to dominate a new industry can throw off mixed signals for investors.   On the one hand, investor excitement about the open-ended growth possibilities can deliver great stock gains. But when such high-growth firms are not yet consistently profitable, which is often the case, their stocks can also be exceptionally risky.   This brings to mind SunEdison, Inc. (NYSE: SUNE), a mid-size technology company with annual revenues of $2.4 billion. Shares of SunEdison have soared more than 400% during the past three years, even though the firm lost an average of $2.56 per share in each of those years. And the road to big returns has been rough, with share price volatility nearly five times that of the overall market.    SunEdison Inc. Earnings Per Share 2009 2010 2011 2012 2013 2014E 2015E -$0.31 $0.15 -$6.68 -$0.66 -$2.46 -$1.09 -$0.80 Source: Bloomberg Such fast and furious share-price gains may seem unsustainable when bottom-line results are so poor, but SunEdison shareholders shouldn’t be deterred, in my view. This is one case where a high-flying, speculative stock could surge yet higher as the company continues the march toward a healthy bottom… Read More

  We have seen some impressive turnarounds in 2014.   #-ad_banner-#Target Corp. (NYSE: TGT) experienced an embarrassing and costly data security breach in late 2013, but its misfortune has reversed, shares are up 18% year-to-date and are now at all-time highs.   After a long stretch of underperformance that culminated in its ejection from the Dow Jones Industrial Average in 2013, the former ‘king of aluminum,’ Alcoa, Inc. (NYSE: AA), is finally looking a lot better, too. Its stock has soared 46% this year.   Meanwhile, shares of the nation’s third-largest pharmacy chain, Rite Aid Corp. (NYSE: RAD), have gained… Read More

  We have seen some impressive turnarounds in 2014.   #-ad_banner-#Target Corp. (NYSE: TGT) experienced an embarrassing and costly data security breach in late 2013, but its misfortune has reversed, shares are up 18% year-to-date and are now at all-time highs.   After a long stretch of underperformance that culminated in its ejection from the Dow Jones Industrial Average in 2013, the former ‘king of aluminum,’ Alcoa, Inc. (NYSE: AA), is finally looking a lot better, too. Its stock has soared 46% this year.   Meanwhile, shares of the nation’s third-largest pharmacy chain, Rite Aid Corp. (NYSE: RAD), have gained 34% on the company’s makeover efforts.   These are just a few examples of this year’s many comeback stories. The question for investors: Which comeback stocks are most likely to continue delivering solid gains?   Investors should consider the rejuvenated diner chain Denny’s Corp. (Nasdaq: DENN). The firm is in making a major transformation, and the payoff to shareholders has already been enormous.     A half-decade ago, Denny’s was struggling and not just because of the recession. At the time, it was losing market share to other better-managed rivals, particularly DineEquity, Inc. (NYSE: DIN), which owns the… Read More

  Although our nation’s healthcare is often seen as too costly, it is credited with many important medical innovations. And benefits accrue to people not just here in the United States, but around the world.   #-ad_banner-#Take obstructive sleep apnea, as an example. The common and insidious sleep disorder, in which breathing briefly stops dozens of times during the night, affects 25 million Americans and 100 million people globally. The prevalence could climb much higher due to rising rates of obesity, a chief sleep apnea risk factor.   Although sleep apnea is most commonly associated with snoring, it’s a major… Read More

  Although our nation’s healthcare is often seen as too costly, it is credited with many important medical innovations. And benefits accrue to people not just here in the United States, but around the world.   #-ad_banner-#Take obstructive sleep apnea, as an example. The common and insidious sleep disorder, in which breathing briefly stops dozens of times during the night, affects 25 million Americans and 100 million people globally. The prevalence could climb much higher due to rising rates of obesity, a chief sleep apnea risk factor.   Although sleep apnea is most commonly associated with snoring, it’s a major health problem. Sleep apena sufferers have a higher risk of heart disease, stroke and daytime fatigue that is severe enough to cause people to fall asleep at the wheel.   Such consequences have spurred massive and growing demand for the devices used to detect and treat sleep apnea. The market for treatments is on pace to expand to $19.7 billion by 2017, from $8 billion in 2011, according to India-based research firm MarketsandMarkets.   Many publicly traded companies are jumping on this trend. But my favorite is ResMed, Inc. (NYSE: RMD), a mid-sized medical device firm with nearly three decades… Read More

  One of the greatest virtues of retail and apparel stocks are their ever-changing fortunes. Investors made a killing in hot stocks such as Ralph Lauren Corp. (NYSE: RL) and Michael Kors Holdings Ltd. (NYSE: KORS) in 2012 and 2013, but were forced to rotate elsewhere in 2014 as these stocks began to underperform their benchmarks. Yet not all former winners become eventual laggards. Case in point: Hanesbrands, Inc. (NYSE: HBI) has risen 360% over the past three years and should deliver more gains in 2015. The company is a top provider of necessities like underwear,… Read More

  One of the greatest virtues of retail and apparel stocks are their ever-changing fortunes. Investors made a killing in hot stocks such as Ralph Lauren Corp. (NYSE: RL) and Michael Kors Holdings Ltd. (NYSE: KORS) in 2012 and 2013, but were forced to rotate elsewhere in 2014 as these stocks began to underperform their benchmarks. Yet not all former winners become eventual laggards. Case in point: Hanesbrands, Inc. (NYSE: HBI) has risen 360% over the past three years and should deliver more gains in 2015. The company is a top provider of necessities like underwear, t-shirts and socks. Among its many well-known brands ​are Hanes, Champion and Playtex. The company was spun off from food and consumer products firm Sara Lee Corporation in 2006.     Robust share price gains mean HBI is no longer the bargain it once was, nor is it a bargain in relation to peers. Hanesbrands Inc. Value Metrics   P/E Ratio P/B Ratio P/S Ratio P/CF Ratio HBI 31.6 7.4 2.2 20.3 Industry Avg. 28.4 4.5 2.2 21.8 HBI Historical Avg. 20.4 4.8 0.8 10.5 Source: Morningstar This company has been in favor for one… Read More

Among his many investing maxims, Warren Buffett makes ample sense when he says “only buy something you’d be perfectly happy to hold if the market shut down for 10 years.”                    It gives food for thought. If you had to buy and hold a specific stock, which would you choose?   My choice: Leggett & Platt, Inc. (NYSE: LEG), which makes dozens of engineered products. It’s a mid-cap stock and not exactly a household name, but this dividend aristocrat has all the characteristics of an investment well worth buying and holding for the long-term.     #-ad_banner-#​Since… Read More

Among his many investing maxims, Warren Buffett makes ample sense when he says “only buy something you’d be perfectly happy to hold if the market shut down for 10 years.”                    It gives food for thought. If you had to buy and hold a specific stock, which would you choose?   My choice: Leggett & Platt, Inc. (NYSE: LEG), which makes dozens of engineered products. It’s a mid-cap stock and not exactly a household name, but this dividend aristocrat has all the characteristics of an investment well worth buying and holding for the long-term.     #-ad_banner-#​Since getting its start back in 1883 as a pioneer in steel-coil bedsprings, Leggett & Platt has evolved into a leading manufacturer of myriad consumer and commercial products. For many years, the firm has been organized into four main segments, each with its own specialized offerings.   Residential Furnishings: innersprings; adjustable beds; furniture hardware; carpet underlay. Commercial Fixturing & Components: standard and custom shelving, counters, showcases and garment racks for retailers; office furniture. Industrial Materials: wire products; steel rods; steel tubing; titanium and nickel tubing for aerospace applications. Specialized Products: car seat suspensions; automotive control… Read More

In an era of ultra-low interest rates, stocks continue to be the obvious choice for most investors. But is that approach wise?   Even as stocks continually post new highs (and carry stretched valuations), a variety of serious economic and geopolitical risks means this is not a good time to be over-exposed to equities. In the current environment, the S&P 500 could easily fall 15%-to-20% or more if the global landscape delivers one of its periodic shocks.   #-ad_banner-#Maybe this is a time to give bonds fresh consideration. And one of my favorite ways to get exposure is the Dodge &… Read More

In an era of ultra-low interest rates, stocks continue to be the obvious choice for most investors. But is that approach wise?   Even as stocks continually post new highs (and carry stretched valuations), a variety of serious economic and geopolitical risks means this is not a good time to be over-exposed to equities. In the current environment, the S&P 500 could easily fall 15%-to-20% or more if the global landscape delivers one of its periodic shocks.   #-ad_banner-#Maybe this is a time to give bonds fresh consideration. And one of my favorite ways to get exposure is the Dodge & Cox Income (NYSE: DODIX) fund.   It carries a respectable 3% yield. By comparison, the overall bond market is yielding 2.5%, and the dividend yield on the S&P 500 now stands below 2.0%. To deliver the superior yield, you might presume that the fund takes on extra risk by loading up on so-called corporate junk or maybe even foreign bonds issued by developing countries at high risk for default.   But I assure you, it doesn’t.   Foreign bonds account for just 12% of Dodge & Cox’s assets, with only modest amounts of emerging markets debt. The portfolio has an… Read More

       Haste makes waste. That’s the possible view on the corner offices at software giant Oracle Corp. (Nasdaq: ORCL), which seems to have taken its sweet time in embracing cloud computing.   Now, management appears to have a clear vision of how it wants the firm to be positioned in the “cloud.” Cloud software is loosely defined as the migration of data storage and analytics to the public internet and away from private, local servers.   To be sure, the $38.5 billion (in revenue) behemoth is well behind cloud leaders like Google, Inc. (NASDAQ: GOOGL), Amazon.com, Inc. (NASDAQ:… Read More

       Haste makes waste. That’s the possible view on the corner offices at software giant Oracle Corp. (Nasdaq: ORCL), which seems to have taken its sweet time in embracing cloud computing.   Now, management appears to have a clear vision of how it wants the firm to be positioned in the “cloud.” Cloud software is loosely defined as the migration of data storage and analytics to the public internet and away from private, local servers.   To be sure, the $38.5 billion (in revenue) behemoth is well behind cloud leaders like Google, Inc. (NASDAQ: GOOGL), Amazon.com, Inc. (NASDAQ: AMZN) and Microsoft Corp. (NASDAQ: MSFT); however, its vast resources and huge customer base make it a good bet to become a top player in what’s still an emerging industry.   What’s more, Oracle doesn’t have to make the transition overnight.   #-ad_banner-#What investors sometimes forget is the broader movement to the cloud is still relatively new and will be a multi-year process. So Oracle’s traditional business remains an enormous asset. In fact, the firm still has 310,000 database customers and about nine in 10 of these renew each year.   As a result, things like software… Read More

In the world of investing, winners stay in the spotlight while laggards get pushed into the shadows. Often times, these stocks get pushed off the radar as investors brace for a period of operational headwinds. Yet as those headwinds abate, opportunity knocks. That’s the set-up in place for Itron, Inc. (Nasdaq: ITRI), one of the world’s leading providers of water, electric and gas meters for use in homes, commercial buildings and industrial settings.The company’s share price slid nearly 15% since February 2013, while the S&P 500 has surged more than 35%. To be sure, Itron has been through the ringer,… Read More

In the world of investing, winners stay in the spotlight while laggards get pushed into the shadows. Often times, these stocks get pushed off the radar as investors brace for a period of operational headwinds. Yet as those headwinds abate, opportunity knocks. That’s the set-up in place for Itron, Inc. (Nasdaq: ITRI), one of the world’s leading providers of water, electric and gas meters for use in homes, commercial buildings and industrial settings.The company’s share price slid nearly 15% since February 2013, while the S&P 500 has surged more than 35%. To be sure, Itron has been through the ringer, as long-term contracts expired, new contract signings have been postponed and public spending on infrastructure has lagged. The company’s revenue base shrank from $2.43 billion in 2011 to an estimated $1.95 billion this year. A lack of profits in three of the past five years surely impacted shares as well.   2009 2010 2011 2012 2013 Revenue (billions) $1.7 $2.3 $2.4 $2.2 $2.0 Net Income (millions) -$2 $105 -$510 $108 -$147 Despite the company’s 2014 headwinds, I think Itron is turning the corner and could be poised for a nice run in 2015 and beyond. Growing Some Smarts The meter… Read More