For long-term investors, there’s nothing better than “Forever Stocks” — shares of firms that are head-and-shoulders above the competition and that are so structurally sound that you can basically own them forever. What long-term investors like just as much is when the crowd is scared out of a Forever Stock, creating a rare opportunity to buy these high-quality shares at a reduced price. Indeed, one the best Forever Stocks is available at an incredible bargain, with shares off sharply in the wake of a surprise second-quarter earnings disappointment. For the quarter, the firm reported earnings per share (EPS)… Read More

For long-term investors, there’s nothing better than “Forever Stocks” — shares of firms that are head-and-shoulders above the competition and that are so structurally sound that you can basically own them forever. What long-term investors like just as much is when the crowd is scared out of a Forever Stock, creating a rare opportunity to buy these high-quality shares at a reduced price. Indeed, one the best Forever Stocks is available at an incredible bargain, with shares off sharply in the wake of a surprise second-quarter earnings disappointment. For the quarter, the firm reported earnings per share (EPS) of $1.11, missing analyst estimates by $0.02. For this, the market saw fit to beat the stock down 12%. A 12% drop for a 2% miss may seem pretty irrational, but it doesn’t faze long-term investors. Any reason will do to get a bargain on Eaton Corp. (NYSE: ETN). This firm is a global leader in power management solutions — things like electrical, mechanical, hydraulic and drivetrain systems — for the automotive, aerospace and agricultural industries. A few variables hindered Eaton in the second quarter. The firm paid $39 million to restructure its industrial segment, $644… Read More

Even the world’s greatest stock pickers make mistakes, including the famous activist investor Carl Icahn. At the end of 2012, Icahn closed his position in one of the world’s leading heavy-duty truck and specialized construction equipment manufacturers. The decision to sell followed a failed hostile takeover attempt in which Icahn offered to buy out current shareholders for almost $3 billion, excluding the nearly 10% stake he already owned. #-ad_banner-#​Had Icahn been successful, he would have pushed for the election of six new board… Read More

Even the world’s greatest stock pickers make mistakes, including the famous activist investor Carl Icahn. At the end of 2012, Icahn closed his position in one of the world’s leading heavy-duty truck and specialized construction equipment manufacturers. The decision to sell followed a failed hostile takeover attempt in which Icahn offered to buy out current shareholders for almost $3 billion, excluding the nearly 10% stake he already owned. #-ad_banner-#​Had Icahn been successful, he would have pushed for the election of six new board members who supported his vision for the company — to spinoff of its JLG subsidiary that makes aerial work platforms and tow-behind trailers. However, not enough shareholders accepted Icahn’s tender offer, and he ended up walking away from the stock entirely. While hindsight is always 20/20, there must be some degree of seller’s remorse on Icahn’s part. Since he jettisoned the stock nearly 20 months ago, the price has spiked 68% — and that’s with a 10% pullback following a third-quarter earnings miss reported on… Read More

With the market getting knocked around more this year, investors are understandably on edge. #-ad_banner-#A recent American Association of Individual Investors (AAII) survey found the highest level of investor pessimism in nearly a year, with 38% of respondents saying they were bearish and 31% being bullish. The last time bears outnumbered bulls by such a margin was in late August 2013, according to the AAII. But why shouldn’t investors be in a sour mood, with global tensions risings and widespread calls for a market correction? These are just the sorts of things that can take the wind out of the… Read More

With the market getting knocked around more this year, investors are understandably on edge. #-ad_banner-#A recent American Association of Individual Investors (AAII) survey found the highest level of investor pessimism in nearly a year, with 38% of respondents saying they were bearish and 31% being bullish. The last time bears outnumbered bulls by such a margin was in late August 2013, according to the AAII. But why shouldn’t investors be in a sour mood, with global tensions risings and widespread calls for a market correction? These are just the sorts of things that can take the wind out of the market’s sails. Nobody needs that, especially retirees. With the market and economy so iffy, how are they supposed to generate the equity returns necessary to sustain them during a phase of their lives that could last many years, even decades? Of course, they’ll need reliable dividend-paying stocks, but now more than ever it’s crucial not to pay too much for such investments. Because if there is a big correction, the loss of principle on overpriced shares will be all that much greater — and retirees certainly don’t need that, either. What they do need are stocks with generous, reliable payouts… Read More

Some high-profile buyout deals have been falling apart lately. For instance, the third largest U.S. wireless carrier Sprint (NYSE: S) just announced it would end its bid to acquire rival T-Mobile (NYSE: TMUS), the number four carrier, because of staunch resistance from regulators. Media giant 21st Century Fox (NYSE: FOXA) ceased its pursuit of Time Warner Cable (NYSE: TWC) because the two simply couldn’t agree on a buyout price. A recent takeover attempt involving the big pharmaceutical firms Pfizer (NYSE: PFE) and AstraZeneca (NYSE: AZN) also went nowhere after the latter backed out at the last minute. #-ad_banner-#These and other… Read More

Some high-profile buyout deals have been falling apart lately. For instance, the third largest U.S. wireless carrier Sprint (NYSE: S) just announced it would end its bid to acquire rival T-Mobile (NYSE: TMUS), the number four carrier, because of staunch resistance from regulators. Media giant 21st Century Fox (NYSE: FOXA) ceased its pursuit of Time Warner Cable (NYSE: TWC) because the two simply couldn’t agree on a buyout price. A recent takeover attempt involving the big pharmaceutical firms Pfizer (NYSE: PFE) and AstraZeneca (NYSE: AZN) also went nowhere after the latter backed out at the last minute. #-ad_banner-#These and other big deals gone sour have been getting plenty of media attention, possibly giving the impression that M&A activity is weakening. But that couldn’t be further from the truth. According to software firm Dealogic, which offers multiple services including M&A analytics, failure rates for M&A deals have been falling since last year and are near pre-recession levels. What’s more, global M&A volume has reached nearly $2.3 trillion this year, a 43% year-over-year increase and the second-highest yearly total ever (after $3.1 trillion in 2007). And it looks like there’s plenty more to come. In a second-quarter letter to shareholders, legendary investor… Read More

China has long been one of the most popular emerging markets, but it certainly isn’t all Asia has to offer those seeking fast growth. In some ways, it’s not even the best Asian play. #-ad_banner-#​While China’s GDP reportedly grew around 10% annually for the past decade and is expected to expand at more than a 7% rate in the future, who really knows how reliable these figures are? Publicly traded Chinese firms are among the least transparent on Earth. And China’s economy is under the thumb of the central government, which is secretive and riddled… Read More

China has long been one of the most popular emerging markets, but it certainly isn’t all Asia has to offer those seeking fast growth. In some ways, it’s not even the best Asian play. #-ad_banner-#​While China’s GDP reportedly grew around 10% annually for the past decade and is expected to expand at more than a 7% rate in the future, who really knows how reliable these figures are? Publicly traded Chinese firms are among the least transparent on Earth. And China’s economy is under the thumb of the central government, which is secretive and riddled with corruption. So despite being the world’s second-largest economy, China may not be doing as well as it seems. And Chinese stocks may sooner or later prove to be greatly overvalued, even with the underperformance of the past few years. I think investors will be better off limiting their China exposure and focusing more on another Asian region where there are exciting investment opportunities — and a more transparent business environment. As a “frontier market,” this area is one of the last places in the world with… Read More

Investors seem to have gotten over the beating that Internet stocks took from early March to early May, when the group plummeted about 20%. Since then, these stocks have rallied nearly 17% and appear to be gaining momentum once again. #-ad_banner-#​Facebook (Nasdaq: FB) has done particularly well, jumping more than 30% from a late-April low of $56 to the current price of almost $75. Following a 15% plunge to $518 in early May, Google (Nasdaq: GOOGL) has made up most of the ground it lost and now trades near $600.  Other well-known Internet stocks have come back strongly,… Read More

Investors seem to have gotten over the beating that Internet stocks took from early March to early May, when the group plummeted about 20%. Since then, these stocks have rallied nearly 17% and appear to be gaining momentum once again. #-ad_banner-#​Facebook (Nasdaq: FB) has done particularly well, jumping more than 30% from a late-April low of $56 to the current price of almost $75. Following a 15% plunge to $518 in early May, Google (Nasdaq: GOOGL) has made up most of the ground it lost and now trades near $600.  Other well-known Internet stocks have come back strongly, too, including travel agent Priceline (Nasdaq: PCLN), retail behemoth Amazon.com (Nasdaq: AMZN) and auction/e-commerce leader eBay (Nasdaq: EBAY).  Those looking to profit from the rebound have the daunting task of deciding which stocks to choose. There are many good ones, but it’s hard to know which. The world of Internet investing is still relatively new and often makes little sense, with stock prices that may seem to based more on hype and unreasonable expectations than solid fundamentals. Basically, it’s just too easy to make the wrong picks and get burned, even if you do your homework. That’s why in this… Read More

Six years after the big crash, the global economy still seems pretty shaky and could even be set for another meltdown, if some of today’s headlines are to be believed. Nevertheless, many enticing investment opportunities still abound — like robotics and automation, or R&A. #-ad_banner-#While R&A has been on the rise for decades, exciting advances have been occurring recently. For instance, the creation of physical objects from a digital file, the amazing manufacturing process known as 3-D printing, has improved so much it can be used to make nearly anything from footwear and firearms. Apparently, you can even… Read More

Six years after the big crash, the global economy still seems pretty shaky and could even be set for another meltdown, if some of today’s headlines are to be believed. Nevertheless, many enticing investment opportunities still abound — like robotics and automation, or R&A. #-ad_banner-#While R&A has been on the rise for decades, exciting advances have been occurring recently. For instance, the creation of physical objects from a digital file, the amazing manufacturing process known as 3-D printing, has improved so much it can be used to make nearly anything from footwear and firearms. Apparently, you can even print out a pizza now. R&A has been playing an ever-larger role in other areas, too, like medicine. For instance, robots are being developed to perform blood draws and other routine medical tasks, as well as more complex ones such as cardiovascular surgery. Increasingly capable robots are already common on assembly lines and in the military. Most investors have heard about how some big companies such as Apple (Nasdaq: AAPL), Google (Nasdaq: GOOG) and Amazon.com (Nasdaq: AMZN) are developing robots and/or snapping up promising robot manufacturers. Apple, for instance, is creating robots to help build iPhones and other devices. Google… Read More

It’s not so common anymore for shares of PepsiCo (NYSE: PEP) to make sizable moves, but they did Wednesday when the beverages and snacks giant reported second-quarter performance.  After investors learned PepsiCo had soundly beaten on earnings and slightly exceeded expectations for sales, shares quickly popped more than 3%. They finished the day nearly 2% higher and are now up almost 11% in 2014, versus about an 8% gain for the S&P 500. That’s right — perennial underperformer PepsiCo is beating the market. #-ad_banner-#Thus, investors may be wondering: After many years… Read More

It’s not so common anymore for shares of PepsiCo (NYSE: PEP) to make sizable moves, but they did Wednesday when the beverages and snacks giant reported second-quarter performance.  After investors learned PepsiCo had soundly beaten on earnings and slightly exceeded expectations for sales, shares quickly popped more than 3%. They finished the day nearly 2% higher and are now up almost 11% in 2014, versus about an 8% gain for the S&P 500. That’s right — perennial underperformer PepsiCo is beating the market. #-ad_banner-#Thus, investors may be wondering: After many years of solid but ordinary performance, has PepsiCo managed to shift into a higher gear and become a growth stock once again? Can shareholders now expect it to consistently deliver market-beating returns going forward? I don’t think so.  Despite PepsiCo’s outperformance so far this year, growth investors probably shouldn’t get overly excited about the stock and they’d be prudent to keep its second-quarter performance in perspective. For instance, while earnings per share (EPS) came in at $1.32 after adjusting for charges and topped the consensus estimate of $1.23 by 7%, they were still a mere penny higher than in 2013’s second… Read More

Although investing is about making money, I’ve noticed that losses are what really stick out in people’s minds.  #-ad_banner-#If their advisor tells them their portfolio is up say 7% this year, they’ll come back with something like “Yeah, but if such-and-such investment hadn’t tanked, I’d be up 10%.” Because the pain of losses tends to outweigh the thrill of gains, I always try to identify firms that can grow faster than average without excessive risk. One in particular fits this description very nicely, and a big reason I’m bullish on it is it’s in the health care sector. Read More

Although investing is about making money, I’ve noticed that losses are what really stick out in people’s minds.  #-ad_banner-#If their advisor tells them their portfolio is up say 7% this year, they’ll come back with something like “Yeah, but if such-and-such investment hadn’t tanked, I’d be up 10%.” Because the pain of losses tends to outweigh the thrill of gains, I always try to identify firms that can grow faster than average without excessive risk. One in particular fits this description very nicely, and a big reason I’m bullish on it is it’s in the health care sector. Obviously, being in health care doesn’t automatically confer a lower-risk, higher-reward profile. Lots of stocks in the sector could easily lose you buckets of money very fast. But let’s face it, populations in the developed world are aging and increasingly in need of all types of health care. That’ll continue to be great for the profits of well-established health care firms with specific competitive advantages and diverse, evolving product lines — like the firm I just mentioned, Actavis (NYSE: ACT), the world’s third-largest generic drug manufacturer. The company, previously known as Watson Pharmaceuticals, achieved that status… Read More

In a market like this, where it seems everyone is waiting for the other shoe to drop, investors need every advantage they can get. And one of the best ways to protect yourself: closely watch the world’s top investors — like hedge fund manager Jim Chanos, aka the “king of shorting.” #-ad_banner-#At the age of 57, Chanos earned this title by making short selling his preferred investing method, and he applies the strategy through his New York City-based hedge fund company Kynikos Associates (appropriately named since Kynikos means “cynic” in greek). Founded by Chanos in… Read More

In a market like this, where it seems everyone is waiting for the other shoe to drop, investors need every advantage they can get. And one of the best ways to protect yourself: closely watch the world’s top investors — like hedge fund manager Jim Chanos, aka the “king of shorting.” #-ad_banner-#At the age of 57, Chanos earned this title by making short selling his preferred investing method, and he applies the strategy through his New York City-based hedge fund company Kynikos Associates (appropriately named since Kynikos means “cynic” in greek). Founded by Chanos in the 1980s, the firm manages about $4 billion through a mix of short-only and combination long-short funds. Chanos first achieved global fame in 2001 when he made a killing on the collapse of former Wall Street darling Enron, a large U.S. energy firm that used accounting tricks and opaque financials to appear highly profitable for years but ultimately went bankrupt. During the financial crisis in 2008, when the market fell 37%, Chanos’ short-only fund Kriticos soared 59%. In the past year or so, Chanos has gained attention for shorting heavy equipment manufacturer Caterpillar (NYSE: CAT) and Canadian IT services firm… Read More