Despite ongoing worry about the risk of a big correction, the market is having quite a good year. The S&P 500 is up about 10%, and the financial media is packed with reports about high-profile takeovers, major initial public offerings and soaring tech and biotech stocks. So investors may be shocked to hear which sector is leading the pack in 2014 — and by a sizeable margin. In fact, the sector is up around 15% year-to-date, placing it more than 4% ahead of the highly-publicized tech sector and even a tad out in front of the red-hot biotech… Read More

Despite ongoing worry about the risk of a big correction, the market is having quite a good year. The S&P 500 is up about 10%, and the financial media is packed with reports about high-profile takeovers, major initial public offerings and soaring tech and biotech stocks. So investors may be shocked to hear which sector is leading the pack in 2014 — and by a sizeable margin. In fact, the sector is up around 15% year-to-date, placing it more than 4% ahead of the highly-publicized tech sector and even a tad out in front of the red-hot biotech industry. Some other sectors aren’t even in the same ballpark as utilities. This outperformance is a surprise, considering the negative sentiment toward utilities at the start of the year. At that point, many analysts expected the sector to underperform because of a greater risk appetite among equity investors and gradually rising interest rates, which analysts surmised might begin pushing more conservative income-oriented investors back toward bonds. However, utilities have retained their appeal in 2014 because in many cases their yields still well-exceeded those of government bonds and high-quality corporate debt. What’s more, many equity investors sought refuge… Read More

Despite its historic bull run, the market is giving investors plenty to worry about. #-ad_banner-#And I’m not even referring to the many potential triggers for a nasty correction you hear a lot about in the news, like rising interest rates, global geopolitical turmoil or a generally overvalued stock market. No, the issue I’d like to focus on is much less publicized and more sector-specific, but the implications are still far-reaching. That’s because it involves the so-called shale boom.  The shale boom, as you may know, is the result of hydraulic fracturing (aka “fracking) and other newer drilling techniques. About a… Read More

Despite its historic bull run, the market is giving investors plenty to worry about. #-ad_banner-#And I’m not even referring to the many potential triggers for a nasty correction you hear a lot about in the news, like rising interest rates, global geopolitical turmoil or a generally overvalued stock market. No, the issue I’d like to focus on is much less publicized and more sector-specific, but the implications are still far-reaching. That’s because it involves the so-called shale boom.  The shale boom, as you may know, is the result of hydraulic fracturing (aka “fracking) and other newer drilling techniques. About a decade ago, energy companies began using these techniques to access oil and gas deposits that were previously unreachable, and since then the U.S. has become the world’s #1 natural gas producer and one of the world’s leading oil producers. If you follow the shale boom, then you’ve likely seen the many impressive estimates about future domestic energy production and heard all the talk about the U.S. finally achieving energy independence. And not only achieving it, but keeping it for decades to come. But what if the energy revolution ended much sooner than expected? This might not even seem like a… Read More

If you’re a fan of the heavyweight boxers of the 1970s, then you know all about “The Fight.” That was the epic first battle between all-time greats Muhammad Ali and Joe Frazier, which Frazier won by unanimous decision in 15 rounds on March 8, 1971. Ali’s ringside physician, Dr. Ferdie Pacheco, has called it the greatest fight Ali ever lost. #-ad_banner-#​Well, today, more than 40 years later, there’s a highly touted new growth stock that’s sort of like that. It might be called the greatest growth stock nobody should own. And… Read More

If you’re a fan of the heavyweight boxers of the 1970s, then you know all about “The Fight.” That was the epic first battle between all-time greats Muhammad Ali and Joe Frazier, which Frazier won by unanimous decision in 15 rounds on March 8, 1971. Ali’s ringside physician, Dr. Ferdie Pacheco, has called it the greatest fight Ali ever lost. #-ad_banner-#​Well, today, more than 40 years later, there’s a highly touted new growth stock that’s sort of like that. It might be called the greatest growth stock nobody should own. And it has been impressive, more than doubling already in the six weeks or so since its initial public offering (IPO) on August 1. The IPO raised nearly $900 million, making it the largest ever by an Israeli company. But despite all the hype, analysts at Deutsche Bank recently showed some sense and downgraded the stock from “buy” to “hold” in the wake of its massive gains. Frankly, though, Deutsche Bank would have better served investors by recommending they sell Mobileye N.V. (NYSE: MBLY), which makes advanced driver assistance systems for the auto… Read More

A number of the world’s best investors have said something to the effect that stocks don’t know where they’ve been, only where they’re headed.   So if a stock has doubled, tripled, quadrupled or more, shareholders shouldn’t assume there’s little or no further gain potential and that it’s time to sell. Indeed, they shouldn’t assume anything. Rather, they should ask themselves where the stock is most likely to go from here.   #-ad_banner-#It’s a question many investors probably have about one highly popular, very fast-growing stock that’s up an amazing 440% in past the five years. Read More

A number of the world’s best investors have said something to the effect that stocks don’t know where they’ve been, only where they’re headed.   So if a stock has doubled, tripled, quadrupled or more, shareholders shouldn’t assume there’s little or no further gain potential and that it’s time to sell. Indeed, they shouldn’t assume anything. Rather, they should ask themselves where the stock is most likely to go from here.   #-ad_banner-#It’s a question many investors probably have about one highly popular, very fast-growing stock that’s up an amazing 440% in past the five years. I’m sure you’ve heard of the company and its products — the best-known being its high-powered and sometimes controversial carbonated energy drinks. The firm also sells noncarbonated beverages like natural soft drinks and iced teas.   It got its latest boost in mid-August when management announced that Coca-Cola (NYSE: KO) planned to acquire nearly a 17% stake for $2.2 billion in cash. Assuming the deal closes by year-end or in early 2015 as expected, the company will also take over Coke’s energy drink lineup (this includes several brands like Full Throttle and Burn) in exchange for its noncarbonated… Read More

Somehow, a lot of the best stocks manage to slip right by individual investors. There the company is, posting massive gains, supposedly right in front of our eyes. Yet, by and large, they go unnoticed by the average Joe. Institutions are often onto them, though. For instance, one compelling stock most individual investors probably haven’t heard of is owned almost entirely by institutions. And these big investors have certainly profited. During the past five years, the stock delivered a gain of more than 240%, or about 28% a year, besting the S&P 500 by nearly 11% per year. Read More

Somehow, a lot of the best stocks manage to slip right by individual investors. There the company is, posting massive gains, supposedly right in front of our eyes. Yet, by and large, they go unnoticed by the average Joe. Institutions are often onto them, though. For instance, one compelling stock most individual investors probably haven’t heard of is owned almost entirely by institutions. And these big investors have certainly profited. During the past five years, the stock delivered a gain of more than 240%, or about 28% a year, besting the S&P 500 by nearly 11% per year. Well, I think it’s high time individual investors know about LKQ Corp. (Nasdaq: LKQ). Perhaps LKQ has gone unnoticed because of the decidedly “unsexy” business it’s in: replacement parts and systems for damaged cars and trucks. These include things like bumper covers, lights, engines and engine parts, wheels, steering and suspension systems, seats and seat components — pretty much anything you’d find in a car or truck. LKQ gets much of its inventory from severely damaged vehicles it buys at salvage auctions — in some cases, parts are refurbished or completely remanufactured. The firm also stocks so-called aftermarket inventory, consisting… Read More

There’s no doubt about it, interest rates are rising. Now, they’re obviously not soaring and their upward journey certainly hasn’t been linear. But at 2.4%, the yield on the benchmark 10-year Treasury bond is substantially above its mid-2012 low of 1.5%. It even spiked briefly to just over 3% at the beginning of the year. And interest rates will most likely continue trending higher, what with the Federal Reserve set to end its rate-suppressing QE (quantitative easing) program next month. There’s also a good chance of the Fed looking to actively raise interest rates next year in what… Read More

There’s no doubt about it, interest rates are rising. Now, they’re obviously not soaring and their upward journey certainly hasn’t been linear. But at 2.4%, the yield on the benchmark 10-year Treasury bond is substantially above its mid-2012 low of 1.5%. It even spiked briefly to just over 3% at the beginning of the year. And interest rates will most likely continue trending higher, what with the Federal Reserve set to end its rate-suppressing QE (quantitative easing) program next month. There’s also a good chance of the Fed looking to actively raise interest rates next year in what would be its first rate hike in around eight years. Most investors have been dreading this eventuality because it’s apt to inflict some near-term pain. Indeed, rate hikes can push down the value of existing bonds because new debt is issued with larger coupons. Rising rates could also trigger a selloff in stocks because of concern about higher borrowing costs for companies, among other things. Ultimately, though, higher interest rates should spell opportunity — especially for conservative income investors. For years now, they’ve had to be willing to take a lot of extra risk just to… Read More

Although it doesn’t always hold true, the reputation of small companies for explosive growth is very often well-deserved. I mean, if your advisor mentioned a small firm with more than 18-fold earnings growth in the past seven years and stock gains of nearly 600% in the past six, wouldn’t you want to hear more? And the thing is, I’m not just making up these numbers for the sake of argument. They’re real. After being founded in 2006, the company I’m referring to hit the ground running, growing revenues more than 30-fold from $8 million in 2007… Read More

Although it doesn’t always hold true, the reputation of small companies for explosive growth is very often well-deserved. I mean, if your advisor mentioned a small firm with more than 18-fold earnings growth in the past seven years and stock gains of nearly 600% in the past six, wouldn’t you want to hear more? And the thing is, I’m not just making up these numbers for the sake of argument. They’re real. After being founded in 2006, the company I’m referring to hit the ground running, growing revenues more than 30-fold from $8 million in 2007 to $241 million in 2013 and $254 million during the past 12 months. Since 2007, earnings per share (EPS) have spiked to $5.28 from $0.29 — that 18-fold increase I mentioned. Since it began trading on the New York Stock Exchange in September 2008, the firm’s stock has rocketed 590% from $6.09 to $41.70. The price has been even higher, peaking around $54 in December 2013. #-ad_banner-#You may be wondering exactly what this company does to be so wildly successful. It must be something phenomenal like developing a crucial vaccine, creating the most advanced artificial intelligence… Read More

There’s an old saying that the people who profited most from the California gold rush of the 1850s weren’t the speculators, but those who sold picks and shovels. Well, there’s a modern-day gold rush underway — the domestic energy boom you’ve probably heard about. This is where new drilling methods, like hydraulic fracturing, are uncovering huge, previously inaccessible oil and gas reserves trapped in shale and other hard rock formations. #-ad_banner-#​Because of the success of such techniques, analysts are making bold predictions about domestic energy output. For instance, some say shale oil production could rise as… Read More

There’s an old saying that the people who profited most from the California gold rush of the 1850s weren’t the speculators, but those who sold picks and shovels. Well, there’s a modern-day gold rush underway — the domestic energy boom you’ve probably heard about. This is where new drilling methods, like hydraulic fracturing, are uncovering huge, previously inaccessible oil and gas reserves trapped in shale and other hard rock formations. #-ad_banner-#​Because of the success of such techniques, analysts are making bold predictions about domestic energy output. For instance, some say shale oil production could rise as much as 88% by 2020 to 16 million barrels per day. Of course, there are analysts who’d dispute this, but most agree the United States could soon become the world’s number one energy producer. But wait, it looks like there’s a big construction boom going on, as well. As you may have heard, housing starts rebounded nicely in July, climbing 15.7% to a seasonally adjusted 1.09 million units. The increase broke a two-month streak of declines, according to the Commerce Department. During the past year alone, revenues rose 17% for the overall residential construction… Read More

Chipotle Mexican Grill, Inc. (NYSE: CMG) has had an absolutely amazing run. Since going public in January 2006, the highly successful Mexican fast-casual chain has seen its stock soar nearly 1,440%. A mere $2,500 invested at the IPO price of $45 would be worth more than $38,000 today. But with its stock price fast approaching $680, how much more upside can Chipotle really have? Well, you may find this hard to believe, but it’s not out of the realm of possibility for shares to more than double in coming years. Essentially, if all goes… Read More

Chipotle Mexican Grill, Inc. (NYSE: CMG) has had an absolutely amazing run. Since going public in January 2006, the highly successful Mexican fast-casual chain has seen its stock soar nearly 1,440%. A mere $2,500 invested at the IPO price of $45 would be worth more than $38,000 today. But with its stock price fast approaching $680, how much more upside can Chipotle really have? Well, you may find this hard to believe, but it’s not out of the realm of possibility for shares to more than double in coming years. Essentially, if all goes well, we could relatively soon see Chipotle surpass $1,500 a share. Although highly intangible, reputation is as potent a catalyst as any for this sort of price appreciation. Simply put, Chipotle is pretty much number one in the fast-casual space and has done more than any other major fast food chain to meet the growing demand for healthy menu items made with fresh, high-quality, organic ingredients. To achieve this, Chipotle buys primarily from small local farmers who are “good stewards of their land.” Management defines “local” as within 350 miles of each restaurant. Read More

Although the market often looks to the world’s top investors for direction on highly-publicized stocks, investing gurus can also lead us to great companies we might never hear about otherwise. #-ad_banner-#​Take the famous hedge fund manager David Einhorn, founder and president of Greenlight Capital, which manages an investment portfolio of more than $7 billion. In Greenlight’s latest 13-f filing for the second quarter, Einhorn revealed he’d more than doubled his position in what most investors would consider a relatively obscure and rather boring technology stock: Lam Research… Read More

Although the market often looks to the world’s top investors for direction on highly-publicized stocks, investing gurus can also lead us to great companies we might never hear about otherwise. #-ad_banner-#​Take the famous hedge fund manager David Einhorn, founder and president of Greenlight Capital, which manages an investment portfolio of more than $7 billion. In Greenlight’s latest 13-f filing for the second quarter, Einhorn revealed he’d more than doubled his position in what most investors would consider a relatively obscure and rather boring technology stock: Lam Research Corp. (Nasdaq: LRCX). At this point, he owns 2.6 million shares with a market value of approximately $189 million based on a recent stock price of about $72. With a 2.5% weighting in Einhorn’s long portfolio –Greenlight makes short bets, too — the expanded position is now quite substantial. And it’s already paying off. Shares are up by about 7% since the end of the Q2. Einhorn first established a position in the stock in Q1. Since then, the stock has risen by more… Read More