Nearly six years after the financial crisis, I think it’s safe to say investors generally still don’t trust the big investment banks, like Morgan Stanley (NYSE: MS), Goldman Sachs (NYSE: GS) and others.  #-ad_banner-#Yet they’re probably still the ones you hear and read about most, if only because they’re the industry heavyweights and get the lion’s share of media attention. That’s a shame. Because it likely causes many investors to overlook smaller rivals with equal or better investment potential but not the stigma the industry “leaders” still have for their major role… Read More

Nearly six years after the financial crisis, I think it’s safe to say investors generally still don’t trust the big investment banks, like Morgan Stanley (NYSE: MS), Goldman Sachs (NYSE: GS) and others.  #-ad_banner-#Yet they’re probably still the ones you hear and read about most, if only because they’re the industry heavyweights and get the lion’s share of media attention. That’s a shame. Because it likely causes many investors to overlook smaller rivals with equal or better investment potential but not the stigma the industry “leaders” still have for their major role in the near-collapse of the financial system. One smaller rival has clearly been a far better investment, completely blowing away Goldman, Morgan Stanley, and the capital markets industry as a whole for many years now. During the past decade, this firm’s stock has delivered annual total returns of 12.8%, compared with 7.3% for Goldman and a skimpy 1.9% for the industry. Anyone who owned Morgan Stanley during that time lost nearly 1% a year. One distinguishing characteristic of this smaller rival is a thoroughly conservative approach to business — the firm’s calling card since its inception about five decades ago. Read More

One of the toughest parts of investing is knowing when to sell your winners, especially ones that have delivered exceptionally large gains in a relatively short time. The thing about stocks that go up fast is they can go down even faster, quickly wiping out your profits — and then some. #-ad_banner-#This may be exactly where one well-known stock is headed because it, too, has risen fast, about 135% in the past year and a half or so. But that’s not the only reason it could drop. Just because a stock is way up doesn’t necessarily mean it’s… Read More

One of the toughest parts of investing is knowing when to sell your winners, especially ones that have delivered exceptionally large gains in a relatively short time. The thing about stocks that go up fast is they can go down even faster, quickly wiping out your profits — and then some. #-ad_banner-#This may be exactly where one well-known stock is headed because it, too, has risen fast, about 135% in the past year and a half or so. But that’s not the only reason it could drop. Just because a stock is way up doesn’t necessarily mean it’s poised to pull back. No, there are specific reasons to be leery of this firm, a relatively small but popular upscale footwear and accessories maker best known for its Ugg brand of boots, shoes, sneakers and other products. I see the company as something of an upstart because even though it has minuscule sales relative to its biggest competitors, such as Nike (NYSE: NKE) and Adidas (OTC: ADDYY), it clearly has had its share of success in the past. Indeed, Deckers Outdoor Corp. (NYSE: DECK) has more than doubled annual sales to $1.6 billion from $689 million in 2008. During… Read More

Although U.S. stocks began the third quarter on a down note due to worries about slowing global growth, they could soon treat investors to more record highs. #-ad_banner-#And the catalyst? Earnings season. With many economists saying the U.S. had a very good second quarter, the number of domestic firms with sales and profits above the Street’s expectations could be surprisingly high. One firm that’s likely to be among the outperformers has actually been exceeding expectations for a while. Including the first quarter of 2013, for instance, it has delivered positive earnings surprises five straight times, with beats ranging… Read More

Although U.S. stocks began the third quarter on a down note due to worries about slowing global growth, they could soon treat investors to more record highs. #-ad_banner-#And the catalyst? Earnings season. With many economists saying the U.S. had a very good second quarter, the number of domestic firms with sales and profits above the Street’s expectations could be surprisingly high. One firm that’s likely to be among the outperformers has actually been exceeding expectations for a while. Including the first quarter of 2013, for instance, it has delivered positive earnings surprises five straight times, with beats ranging from about 4% to more than 11%. Based on how well the company has been doing, it’s a good bet to keep the streak alive when it reports second-quarter performance on July 31. What’s more, the stock of leading auto parts manufacturer BorgWarner (NYSE: BWA) should remain an excellent long-term investment despite more than quadrupling during the past five years. If you’re not familiar with BorgWarner, it’s a leading innovator of auto and commercial vehicle parts designed to enhance fuel efficiency and reduce carbon emissions. The company generates 70% of revenues from such items as turbochargers, emission system… Read More

Recent claims that stocks have reached the euphoria stage probably seem a bit out of touch to a lot of investors. While the market is at record highs and the bulls have mostly had their way for five or six years, I suspect many — maybe even most — investors are anything but euphoric. #-ad_banner-#That’s because there’s nothing to warrant euphoria — and investors know it. For instance, they’re well aware that not a whole lot has been done about the issues underlying the 2008 financial crisis. And the current recovery, while certainly a step up, is a big disappointment… Read More

Recent claims that stocks have reached the euphoria stage probably seem a bit out of touch to a lot of investors. While the market is at record highs and the bulls have mostly had their way for five or six years, I suspect many — maybe even most — investors are anything but euphoric. #-ad_banner-#That’s because there’s nothing to warrant euphoria — and investors know it. For instance, they’re well aware that not a whole lot has been done about the issues underlying the 2008 financial crisis. And the current recovery, while certainly a step up, is a big disappointment because millions of people have had to settle for lower-paying jobs and an eroding standard of living. For reasons like these, most investors remain deeply skeptical of stocks and the economy, in my view. And I think most know full well this market is loaded with risk. Still, the long-term outlook for stocks is very promising because so many companies have the resources, vision and market leadership necessary to prosper on a global scale over time. The key nowadays is knowing how best to gain exposure to them while minimizing risk. Of course, you could essentially run your own mini… Read More

Although many well-known stocks have been generating fantastic returns, a lot of money has also been made in the last places you might expect… Like kitchen appliances, for instance. I mean, who’d ever think they could still propel a company’s stock to massive gains? #-ad_banner-#Well, they sure have for one obscure mid-cap company that’s actually a leading manufacturer of ovens, ranges and other cooking equipment for commercial and residential use. The company’s stock is up more than 800% in the past 10 years, so you’d think it would be all over the financial news. But it’s… Read More

Although many well-known stocks have been generating fantastic returns, a lot of money has also been made in the last places you might expect… Like kitchen appliances, for instance. I mean, who’d ever think they could still propel a company’s stock to massive gains? #-ad_banner-#Well, they sure have for one obscure mid-cap company that’s actually a leading manufacturer of ovens, ranges and other cooking equipment for commercial and residential use. The company’s stock is up more than 800% in the past 10 years, so you’d think it would be all over the financial news. But it’s not one you really hear much about, and even some top mutual funds haven’t paid it much mind. For instance, it’s nowhere to be found in the top 10 holdings list of Neuberger Berman Genesis (Nasdaq: NBGNX), a famous small- and mid-cap equity fund that’s beaten the market handily over the years (including expenses and fees). In fact, the stock is only #38 in NBGNX’s 100-holding, $14.7 billion portfolio. And its overall weighting of barely 1% is far too small to have much of an effect on fund performance. Now, I certainly don’t mean to knock Neuberger Berman Genesis. It’s… Read More

Whatever your take on health care in America, one thing’s for sure: The U.S. health care system creates a lot of waste — millions of tons each year of the nastiest stuff you can imagine.  #-ad_banner-#Soiled wound dressings and surgical gloves, used syringes, discarded surgical instruments… even human tissue left over from surgery. The same goes for plenty of other countries, too. Sounds like just the investment opportunity you were looking for, right? Well, it actually could be. Somebody’s got to collect, treat, and properly dispose of all that odious and potentially hazardous medical waste — and there’s… Read More

Whatever your take on health care in America, one thing’s for sure: The U.S. health care system creates a lot of waste — millions of tons each year of the nastiest stuff you can imagine.  #-ad_banner-#Soiled wound dressings and surgical gloves, used syringes, discarded surgical instruments… even human tissue left over from surgery. The same goes for plenty of other countries, too. Sounds like just the investment opportunity you were looking for, right? Well, it actually could be. Somebody’s got to collect, treat, and properly dispose of all that odious and potentially hazardous medical waste — and there’s a whole industry devoted to that. The nice thing is you don’t have to research a bunch of different medical waste management firms just to pick the one or two you think are worth your investment dollars. In the decidedly unappealing world of medical waste, there’s one undisputed champ. This firm’s stock has at least 70% upside and is a good bet to beat the market in coming years, in my opinion. It certainly has a history of market trouncing, delivering more than 27% a year for the past 15 years, compared with a 4.4% rate of return for the… Read More

As irksome as Wall Street’s fickle nature can be, it’s often of great benefit to long-term investors.  #-ad_banner-#When the Street exits high-quality stocks en masse because of some transient headwinds, it allows value seekers to swoop in and buy at deep discounts — and then make a killing when shares rebound. There’s just such an opportunity right now, and it involves one of the nation’s leading sporting goods retailers.  Shares of this company, which has 566 stores in 46 states, are down more than 20% this year because of a rough fiscal second quarter related mainly to weakness… Read More

As irksome as Wall Street’s fickle nature can be, it’s often of great benefit to long-term investors.  #-ad_banner-#When the Street exits high-quality stocks en masse because of some transient headwinds, it allows value seekers to swoop in and buy at deep discounts — and then make a killing when shares rebound. There’s just such an opportunity right now, and it involves one of the nation’s leading sporting goods retailers.  Shares of this company, which has 566 stores in 46 states, are down more than 20% this year because of a rough fiscal second quarter related mainly to weakness in two key categories — golfing and hunting equipment, which together account for 30% of sales. At this point, the stock is trading at nearly $46, not far off its 52-week low of $42.33. However, it seems the Street is already beginning to realize it was wrong about this market leader — Dick’s Sporting Goods (NYSE: DKS). Indeed, the stock is up nearly 6% in the past month and shares have been trending solidly upward during the past week, as well. The reason for this apparent change of heart is anyone’s guess. It could have been the realization… Read More

As expected, the economy shrank in the first quarter, a recent U.S. Commerce Department report confirmed. However, the shrinkage is proving worse than originally thought, with revised GPD data showing a 2.9% annualized rate of contraction versus the 1.7% rate economists predicted. #-ad_banner-#But this could actually be really good news for investors. Indeed, the dismal first quarter has created a prime chance to get deals on high-quality stocks that are most vulnerable to economic downturns. And since unusually cold weather, not poor fundamentals, are widely considered mainly to blame for the bad first quarter, it may not be long until… Read More

As expected, the economy shrank in the first quarter, a recent U.S. Commerce Department report confirmed. However, the shrinkage is proving worse than originally thought, with revised GPD data showing a 2.9% annualized rate of contraction versus the 1.7% rate economists predicted. #-ad_banner-#But this could actually be really good news for investors. Indeed, the dismal first quarter has created a prime chance to get deals on high-quality stocks that are most vulnerable to economic downturns. And since unusually cold weather, not poor fundamentals, are widely considered mainly to blame for the bad first quarter, it may not be long until these beaten-down stocks rebound — especially since there are already signs the economy has been gaining steam in the second quarter. One beaten-down stock I like a lot is off more than 30% this year and much of the carnage occurred after this national retailer reported a 14% decline in first-quarter profits.  Like the overall economy, the firm did poorly mainly because of the severe winter, which clearly hurt business at 135 of its 331 locations. At these stores, first-quarter net sales dropped an average of 3.8%. But at the other 196 outlets where winter weather wasn’t an issue, first-quarter… Read More

If a firm that has earned the title of “Baby Berkshire” actually outperforms Warren Buffett’s legendary Berkshire Hathaway (NYSE: BRK-B), what should it be called then?  It’s just a hypothetical question, but I ask because the stock of one pretty well-known Baby Berkshire has been soundly beating the real Berkshire for quite some time. #-ad_banner-#As you can see, this Baby Berkshire is substantially ahead at just about every time, and it has led by nearly 2 full percentage points a year for the past decade and a half.  The firm takes after Buffett’s… Read More

If a firm that has earned the title of “Baby Berkshire” actually outperforms Warren Buffett’s legendary Berkshire Hathaway (NYSE: BRK-B), what should it be called then?  It’s just a hypothetical question, but I ask because the stock of one pretty well-known Baby Berkshire has been soundly beating the real Berkshire for quite some time. #-ad_banner-#As you can see, this Baby Berkshire is substantially ahead at just about every time, and it has led by nearly 2 full percentage points a year for the past decade and a half.  The firm takes after Buffett’s Berkshire in a couple key ways, including its business model — a diverse and profitable insurance business supplemented by an adeptly managed stock portfolio. Also, the firm refuses to let the constant din of notoriously shortsighted Wall Street distract it from its goal of delivering excellent long-term results. I’m referring to specialty insurer Markel (NYSE: MKL), which currently only has a market capitalization of $9.1 billion (Berkshire’s Class A shares alone are worth more than $310 billion). But I don’t think it’ll be long until Markel achieves large-cap status — thanks to fast-rising revenues, which have more than doubled since… Read More

Wall Street’s greeting of the new Fire smartphone introduced by online retail giant Amazon.com (Nasdaq: AMZN) might be described as a collective “meh.” Since the phone’s unveiling on June 18, Amazon’s stock hasn’t moved much — in fact, it’s down a couple percent. Perhaps the Street hasn’t yet fully considered the Fire’s potential. Or maybe there just isn’t much that can propel the stock right now since its price-to-earnings (P/E) ratio is far beyond excessive already (more than 500 versus 19 for the S&P 500) and there was a pretty good… Read More

Wall Street’s greeting of the new Fire smartphone introduced by online retail giant Amazon.com (Nasdaq: AMZN) might be described as a collective “meh.” Since the phone’s unveiling on June 18, Amazon’s stock hasn’t moved much — in fact, it’s down a couple percent. Perhaps the Street hasn’t yet fully considered the Fire’s potential. Or maybe there just isn’t much that can propel the stock right now since its price-to-earnings (P/E) ratio is far beyond excessive already (more than 500 versus 19 for the S&P 500) and there was a pretty good run-up in the month or so leading up to the Fire’s introduction. #-ad_banner-#Whatever the reason for the Street’s apparent apathy, I suspect the Fire will eventually prove to be a competitive alternative to other smartphones. What’s more, it should help to significantly boost Amazon’s already fast-growing revenues, which expanded more than 11-fold during the past decade, to $78.1 billion from $6.9 billion in 2004.  That said, the Fire probably isn’t a game-changer, although it could theoretically become one since smartphones tend to evolve and improve over time. In its present form, though, the Fire still offers compelling features… Read More