#-ad_banner-#Even blue-chip stocks can be bad investments.   Take American Tower Corp. (NYSE: AMT) as an example. It is the world’s largest independent operator of wireless and broadcast communication sites, and is looking at an onerous, possibly unmanageable debt load.   The company may seem bulletproof, operating roughly 70,000 wireless cell tower sites across the globe.   Financial results have been superb, with revenues more than doubling since 2009 to $4.1 billion. The firm’s stock delivered a market-trouncing 17% rate of return during the past five years.     But American Tower… Read More

#-ad_banner-#Even blue-chip stocks can be bad investments.   Take American Tower Corp. (NYSE: AMT) as an example. It is the world’s largest independent operator of wireless and broadcast communication sites, and is looking at an onerous, possibly unmanageable debt load.   The company may seem bulletproof, operating roughly 70,000 wireless cell tower sites across the globe.   Financial results have been superb, with revenues more than doubling since 2009 to $4.1 billion. The firm’s stock delivered a market-trouncing 17% rate of return during the past five years.     But American Tower is losing steam. After increasing earnings 19% annually from fiscal years 2009 to 2014, growth is set to downshift to about an 11% pace, analysts say.   And that forecast may be optimistic in view of the firm’s heavy exposure to weakening foreign currencies, which are showing progressively smaller dollar values as the greenback soars. This headwind is apt to worsen as central bank stimulus outside the United States causes foreign currencies to tumble further and as foreign sales account for an increasingly larger chunk of American Tower’s business. Such sales are projected to rise to 40% of total revenue… Read More

Although the market may seem expensive to many investors, solid bargains remain in many individual stocks.  You can find opportunity in both value stocks and riskier stocks. Risk-tolerant investors might consider Puma Biotechnology, Inc. (NYSE: PBYI), a development-stage pharmaceutical firm. Puma is on the cusp of receiving FDA approval for a promising new breast cancer treatment. Investors have already shown their growing interest in Puma, boosting shares 1,600% in the past five years. Yet, I’d argue that Puma has by much more room to run. The firm’s appeal stems in large part from its value as a buyout target. If… Read More

Although the market may seem expensive to many investors, solid bargains remain in many individual stocks.  You can find opportunity in both value stocks and riskier stocks. Risk-tolerant investors might consider Puma Biotechnology, Inc. (NYSE: PBYI), a development-stage pharmaceutical firm. Puma is on the cusp of receiving FDA approval for a promising new breast cancer treatment. Investors have already shown their growing interest in Puma, boosting shares 1,600% in the past five years. Yet, I’d argue that Puma has by much more room to run. The firm’s appeal stems in large part from its value as a buyout target. If you’re familiar with biotech, then you know mergers and acquisitions, or M&A, has been a major industry theme for many years. Larger drug makers have been snapping up smaller ones in their quest for growth and deeper product pipelines, pushing M&A activity back to levels not seen in more than half a decade. To illustrate that, take a look this chart I saw in Reuters recently. In Puma’s case, its flagship breast cancer drug, neratinib, could fetch a hefty premium from any number of the big pharmaceutical names. Indeed, analysts at RBC Capital Markets have called… Read More

Public health insurance is a fast-growing business. The number of people enrolled in Medicaid and the Children’s Health Insurance Program has soared 19% to nearly 70 million since the Affordable Care Act (ACA) went into effect in 2013. This group of new enrollees, which represents more than 20% of the U.S. population, qualifies for public health insurance by meeting ACA requirements for annual household incomes that are less than 138% of federally-defined poverty levels (an annual salary of $11,770 for an individual and $24,250 for a family of four). Although highly controversial, the advent of government-sponsored health insurance has been… Read More

Public health insurance is a fast-growing business. The number of people enrolled in Medicaid and the Children’s Health Insurance Program has soared 19% to nearly 70 million since the Affordable Care Act (ACA) went into effect in 2013. This group of new enrollees, which represents more than 20% of the U.S. population, qualifies for public health insurance by meeting ACA requirements for annual household incomes that are less than 138% of federally-defined poverty levels (an annual salary of $11,770 for an individual and $24,250 for a family of four). Although highly controversial, the advent of government-sponsored health insurance has been a boon to firms involved in delivering health benefits. Analysts are especially high on managed care provider Molina Healthcare, Inc. (NYSE: MOH). Molina is not a well-known stock, but is clearly gaining a following these days. Following recent share price gains, investors may think they’ve missed the boat, but that’s not the case. Molina’s focus on providing healthcare to those receiving government assistance makes it a key beneficiary of public healthcare’s rapid expansion and a solid bet to outperform again this year.  Molina’s recent operating trends are quite impressive: the company now insures more than 2.6 million people,… Read More

The past few years have been cruel to gold, a casualty of a relentless bull market in stocks and, more recently, the U.S. dollar. Since October 2013, the price has plunged from nearly $1,800 an ounce to about $1,150 — roughly a 35% drop. The bear market in gold blindsided most precious metals investors. In the early days of the Great Recession, many were convinced that gold — and not stocks — had many years of big gains ahead. These gold bulls assumed that the Federal Reserve’s massive “money printing” program would lead to runaway inflation. Yet six… Read More

The past few years have been cruel to gold, a casualty of a relentless bull market in stocks and, more recently, the U.S. dollar. Since October 2013, the price has plunged from nearly $1,800 an ounce to about $1,150 — roughly a 35% drop. The bear market in gold blindsided most precious metals investors. In the early days of the Great Recession, many were convinced that gold — and not stocks — had many years of big gains ahead. These gold bulls assumed that the Federal Reserve’s massive “money printing” program would lead to runaway inflation. Yet six years and three rounds of stimulus later, inflationary pressures remain non-existent. This is why you may be surprised to hear that now could be the best time in a while to own the yellow metal. With the global economy in flux, there are several potential catalysts for substantially higher gold prices in 2015. A Hamstrung Fed After a long stretch of zero-rate policy, investors are finally realizing the Fed wants to start raising interest rates as soon as possible, maybe as early as June. This has been a headwind for gold recently, because higher rates would further boost an already… Read More

  While many investors like to pursue hot stocks, others prefer investing in companies in the midst of an operational turnaround.   #-ad_banner-#In today’s market, I see potential for one high-profile stock that has been underperforming the market lately: auto industry icon Ford Motor Co. (NYSE: F).   Ford’s post-recession sales momentum has cooled a bit in recent months. For example, the company’s February sales in the United States fell roughly 2% year over year, well below analyst forecasts for nearly a 6% gain.   However, main rivals Toyota Motor Corp. (NYSE: TM), General Motors Co. (NYSE: GM) and Honda… Read More

  While many investors like to pursue hot stocks, others prefer investing in companies in the midst of an operational turnaround.   #-ad_banner-#In today’s market, I see potential for one high-profile stock that has been underperforming the market lately: auto industry icon Ford Motor Co. (NYSE: F).   Ford’s post-recession sales momentum has cooled a bit in recent months. For example, the company’s February sales in the United States fell roughly 2% year over year, well below analyst forecasts for nearly a 6% gain.   However, main rivals Toyota Motor Corp. (NYSE: TM), General Motors Co. (NYSE: GM) and Honda Motor Co. Ltd. (NYSE: HMC) all boosted U.S. sales in February, posting year-over-year gains of 13%, 4% and 5%, respectively. This news wasn’t the type that inspires confidence in Ford, especially following a tough 2014. Sales fell a modest 2% to $144 billion and per share profits fell by more than half to $0.80 a share for the year.   So what’s been holding Ford back?   For one thing, the automotive division stumbled in North America last year, posting declines in revenue and pretax profits of nearly 5% and 22%, respectively, in the region. The problem was Ford just… Read More

  Investors often have difficulty letting go of outperforming growth stocks, even if there are clear signs it’s time to cash out. Case in point: the seemingly unstoppable rise in shares of The Kroger Co. (NYSE: KR), the nation’s largest supermarket chain by revenue.       With such bullish-looking technicals, Kroger may seem like an investment you can buy and hold, especially after the company’s recent quarterly report. In early March, Kroger announced that Q4 earnings grew 23% (from the year ago quarter), well ahead of consensus forecasts.   The quarterly report caps off an impressive… Read More

  Investors often have difficulty letting go of outperforming growth stocks, even if there are clear signs it’s time to cash out. Case in point: the seemingly unstoppable rise in shares of The Kroger Co. (NYSE: KR), the nation’s largest supermarket chain by revenue.       With such bullish-looking technicals, Kroger may seem like an investment you can buy and hold, especially after the company’s recent quarterly report. In early March, Kroger announced that Q4 earnings grew 23% (from the year ago quarter), well ahead of consensus forecasts.   The quarterly report caps off an impressive five-year surge, which saw revenues jump more than 40% to nearly $109 billion and net earnings soar more than 30-fold to $3.44 a share during the past five years.   #-ad_banner-#However, it would be unwise to assume Kroger will keep outperforming. With the company’s stock perched at record highs, now is a perfect time to determine if fundamentals can support current prices. And from where I’m sitting, this popular stock looks set to boil over.   Investor Overexuberance In the fiscal year ended February 1, earnings rose about 19%. Yet Kroger’s stock gained nearly 90% during the same period. This… Read More

  In the past 15 years, the obituary for the traditional “brick-and-mortar” retailer seems to have been written many times over. However, a decade-and-a-half later, online shopping only accounts for just 6%-7% of all retail sales.   #-ad_banner-#To be sure, e-commerce has clearly altered the face of retail, just not as expected. Rather than making physical store locations obsolete, an online presence has become a complementary part of the retail landscape. These days, the successful brick-and-mortar retailer is one that can deftly merge physical store and online operations to best serve customers and move inventory.   Few do this as… Read More

  In the past 15 years, the obituary for the traditional “brick-and-mortar” retailer seems to have been written many times over. However, a decade-and-a-half later, online shopping only accounts for just 6%-7% of all retail sales.   #-ad_banner-#To be sure, e-commerce has clearly altered the face of retail, just not as expected. Rather than making physical store locations obsolete, an online presence has become a complementary part of the retail landscape. These days, the successful brick-and-mortar retailer is one that can deftly merge physical store and online operations to best serve customers and move inventory.   Few do this as well as Nordstrom, Inc. (NYSE: JWN), a century-old high-end department store chain that is known for its top-notch customer service.   Though the company’s upscale image remains intact, it has evolved with the times. Today, Nordstrom Rack discount locations actually outnumber traditional Nordstrom department stores (167 to 119), while e-commerce paves the way for future growth.   Investors are clearly pleased: During the past three years, shares returned more than 57%, compared with a roughly 52% gain for the S&P 500. The outperformance of Nordstrom’s stock makes sense. During the past five fiscal years… Read More

Warren Buffett and many other top value investors have one simple rule: “Buy good stocks when they’re down.” These days, such investors should be giving a fresh look at Swiss pharmaceutical giant Roche Holding AG (OTC: RHHBY).   #-ad_banner-#The company’s stock has slid out of favor following unfavorable results from a pair of high-profile clinical trials last year.   One involved Roche’s experimental Alzheimer’s drug, Gantenerumab, which showed such low efficacy that the trial was stopped early. In the second trial, results were insufficient to extend indications for one of Roche’s existing breast cancer treatments, Kadcyla. Read More

Warren Buffett and many other top value investors have one simple rule: “Buy good stocks when they’re down.” These days, such investors should be giving a fresh look at Swiss pharmaceutical giant Roche Holding AG (OTC: RHHBY).   #-ad_banner-#The company’s stock has slid out of favor following unfavorable results from a pair of high-profile clinical trials last year.   One involved Roche’s experimental Alzheimer’s drug, Gantenerumab, which showed such low efficacy that the trial was stopped early. In the second trial, results were insufficient to extend indications for one of Roche’s existing breast cancer treatments, Kadcyla.   Since the results of the two trials were released in December, shares of Roche are down roughly 8%.   A significant drop in earnings last year, related to a transient spike in operating costs, have also helped turn investors against Roche.       However, it’s only a matter of time before the negative sentiment wears off. Once investors realize that Roche remains a leading provider of cancer drugs and that the company produces robust dividends, the share price could quickly recover.   Roche still has Herceptin, Avastin and Rituxan, a blockbuster trio used to treat breast,… Read More

#-ad_banner-#If you’re a fan of old-time boxers, then you probably remember George Chuvalo. He was a sturdy Canadian heavyweight of the 60s and 70s who faced the best fighters of his time, including some extremely heavy hitters. In 93 hard-fought bouts, he came out on top far more often than not and wasn’t knocked down once. As an investor, Chuvalo reminds me of United Technologies Corp. (NYSE: UTX), a large conglomerate serving the aerospace, construction and other industries. Like Chuvalo, United Technologies has been the epitome of consistency, delivering decades of… Read More

#-ad_banner-#If you’re a fan of old-time boxers, then you probably remember George Chuvalo. He was a sturdy Canadian heavyweight of the 60s and 70s who faced the best fighters of his time, including some extremely heavy hitters. In 93 hard-fought bouts, he came out on top far more often than not and wasn’t knocked down once. As an investor, Chuvalo reminds me of United Technologies Corp. (NYSE: UTX), a large conglomerate serving the aerospace, construction and other industries. Like Chuvalo, United Technologies has been the epitome of consistency, delivering decades of solid growth in earnings, cash flow and dividends. And UTX proved that it can also take a punch. The firm faced unusual adversity in 2014, but powered through and went on to post solid financial results. Among last year’s troubles: —          Delays in meeting order deadlines for 28 Cyclone shipboard helicopters for the Canadian military. —          A couple big setbacks in the Pratt & Whitney division, including testing failures of a new commercial engine being developed for aircraft maker Bombardier, Inc. (OTC: BDRAF… Read More

Although memories of the Great Recession linger, a case can be made that better days lie ahead. That’s because central banks around the world are pursuing bold stimulus measures. And the United States is looking solid enough for the Federal Reserve to contemplate its first interest rate hike in nearly a decade. Moreover, gas prices have fallen sharply, which aids consumers, and the stock market is way up, having nearly tripled from recession lows. But this is no time for investor complacency: indeed a key economic indicator suggests trouble may… Read More

Although memories of the Great Recession linger, a case can be made that better days lie ahead. That’s because central banks around the world are pursuing bold stimulus measures. And the United States is looking solid enough for the Federal Reserve to contemplate its first interest rate hike in nearly a decade. Moreover, gas prices have fallen sharply, which aids consumers, and the stock market is way up, having nearly tripled from recession lows. But this is no time for investor complacency: indeed a key economic indicator suggests trouble may be brewing just beneath the surface. The index in question: the Baltic Dry Index. As a composite measure of worldwide daily shipping prices for commodities like iron ore, steel, cement and coal, the BDI provides insight into manufacturer demand for the raw materials that, literally and figuratively, form the foundation of the global economy. Typically, a rising BDI coincides with stronger demand from producers, who’ll need raw materials to generate energy and manufacture a variety of things, from roads and bridges to cars and machinery. This is… Read More