Heading off early next week ahead of the Labor Day weekend? So are many others, including Wall Street traders. As they leave their trading desks, trading volumes can get awfully light. That makes the markets vulnerable — on the upside or the downside — to any news items that are unexpected. With a dearth of corporate news but a boatload of economic releases next week, investors need to stay vigilant. Here’s a look at four key items to watch: 1) On Tuesday, August 30th, we’ll get the latest reading from the monthly Case-Shiller home… Read More

Heading off early next week ahead of the Labor Day weekend? So are many others, including Wall Street traders. As they leave their trading desks, trading volumes can get awfully light. That makes the markets vulnerable — on the upside or the downside — to any news items that are unexpected. With a dearth of corporate news but a boatload of economic releases next week, investors need to stay vigilant. Here’s a look at four key items to watch: 1) On Tuesday, August 30th, we’ll get the latest reading from the monthly Case-Shiller home price index. The data reflects June prices, and this report is coming off a surprisingly robust tally the prior month that showed a +4.6% gain in home prices in May. In fact, this report has looked a tad better for 15 straight months, after bottoming with an -18% drop in February, 2009. Many of those ensuing months were still negative, but less so as time passed. Now, with a string of three straight positive readings, can we keep it up? Any reading above +5.0% would be a real positive for the markets and could boost housing stocks. Then again,… Read More

Investors that look to short stocks seek out two kinds of investments: those that are simply overvalued, and those that may go out of business. The latter are known as a “terminal short,” (as in terminally ill), and though they are rare, they can be very profitable. Parsing TiVo’s (Nasdaq: TIVO) fiscal second quarter results that were released Wednesday evening, you’ll find a company that is beginning to lose altitude. And as you look out into the future of TV and Internet programming, it’s hard to see how the company will… Read More

Investors that look to short stocks seek out two kinds of investments: those that are simply overvalued, and those that may go out of business. The latter are known as a “terminal short,” (as in terminally ill), and though they are rare, they can be very profitable. Parsing TiVo’s (Nasdaq: TIVO) fiscal second quarter results that were released Wednesday evening, you’ll find a company that is beginning to lose altitude. And as you look out into the future of TV and Internet programming, it’s hard to see how the company will remain as a compelling choice for either consumers or its media partners. Back in the red As young companies like TiVo are in growth mode, they are excused from the need to show positive cash flow. The company’s sales rose nicely through the middle of the past decade, but growth sharply slowed in fiscal (January) 2008 and has since turned negative. Trouble is, the company was only able to generate positive cash flow in fiscal 2009, but is once again back in negative cash flow mode. That’s worrisome enough. TiVo’s… Read More

Investors in 3PAR (NYSE: PAR) can’t believe their good fortune. They woke up last Monday to find that their investment had nearly doubled in value after Dell (Nasdaq: DELL) announced plans to buy the data storage company. And this Monday morning, they got another gift when Hewlett-Packard (NYSE: HPQ) announced… Read More

Oil looks to be on the way down and I have a way you can potentially take advantage of the opportunity with an inverse exchange-traded fund (ETF) First, I want you to take a look at the chart for the… Read More

One of the most fertile areas for investment research can always be found among stocks that trade for less than the price of a deluxe cheeseburger. When a stock is below $5 or $6, many mutual funds are prevented from owning them. Yet if these stocks can… Read More

Throughout the summer, a clear theme has emerged. High-tech companies have reported generally solid results, and yet shares in the sector keep drifting down toward 52-week lows. Despite their considerable cash balances, investors have grown increasingly concerned that sector growth will stall out. That’s why Intel’s (Nasdaq: INTC) just-announced decision to buy security software vendor McAfee (NYSE: MFE) is so important. It’s a clear sign that these tech titans will use their balance sheets to help alleviate those growth concerns. Short -term implications The fact that Intel is paying a… Read More

Throughout the summer, a clear theme has emerged. High-tech companies have reported generally solid results, and yet shares in the sector keep drifting down toward 52-week lows. Despite their considerable cash balances, investors have grown increasingly concerned that sector growth will stall out. That’s why Intel’s (Nasdaq: INTC) just-announced decision to buy security software vendor McAfee (NYSE: MFE) is so important. It’s a clear sign that these tech titans will use their balance sheets to help alleviate those growth concerns. Short -term implications The fact that Intel is paying a +60% premium to Wednesday’s close tells you that private market valuations are often far higher than the value these companies are getting as public entities. It’s also noteworthy that Intel’s offer of $48 a share is just above McAfee’s 52-week trading range. Generally speaking, buyout offers must exceed that threshold to avoid accusations that a company is being sold on the cheap while it is out of favor. Then again, McAfee’s shares haven’t seen $48 since the dot-com era of 1999. McAfee’s board would have been hard-pressed to reject this offer,… Read More

Super-investor Warren Buffett has made a big bet on Johnson & Johnson (NYSE: JNJ), adding more than 17.4 million shares to the portfolio of his holding company, Berkshire Hathaway (NYSE: BRK-B). His stake in J&J is worth about $2.4 billion at current prices. The move can be seen as a classic Buffett “value” play: J&J shares, at about $58, are well off their 52-week high of $66.20 and are down nearly -10% for the year. The company has annual revenue of more than $60 billion and consistently earns returns on… Read More

Super-investor Warren Buffett has made a big bet on Johnson & Johnson (NYSE: JNJ), adding more than 17.4 million shares to the portfolio of his holding company, Berkshire Hathaway (NYSE: BRK-B). His stake in J&J is worth about $2.4 billion at current prices. The move can be seen as a classic Buffett “value” play: J&J shares, at about $58, are well off their 52-week high of $66.20 and are down nearly -10% for the year. The company has annual revenue of more than $60 billion and consistently earns returns on shareholder equity of between 25% and 30%. It has posted an increase in earnings for at least the past 10 years, and 2010 profit forecasts imply a +188.3% increase in net earnings since 2000. (Earnings have surprised to the upside for the past five years, according to Bloomberg.) The J&J stake wasn’t the only health-care bet made by the 79-year-old Buffett, whom Forbes lists as the second-richest man in the United States, with an estimated net worth of $40 billion, second only to… Read More

One of the benefits of closely monitoring stocks month after month is that you get to identify great companies to put on your watch list. And when these companies temporarily fall out of favor, you can take advantage. During the past decade, I have always been very impressed with the… Read More

America’s largest producer of crushed stone, sand and gravel appears as if it could get crushed itself. Concrete and asphalt maker Vulcan Materials (NYSE: VMC) recently reported disappointing second quarter results below analysts’ expectations. Higher material costs and lower product pricing negatively affected the results. Read More

When a trade turns sour, smart investors stand by their convictions and use any share price weakness to build a bigger position. And that’s just what George Soros is doing with his investment in electronics retailer Best Buy (NYSE: BBY). Shares touched a new intra-day low on Monday, but Soros is holding firm. According to TickerSpy.com, he owns more than three million shares, and his last move was as a buyer of another 299,000 shares. Soros isn’t looking like much of a market timer these days, as shares of Best Buy… Read More

When a trade turns sour, smart investors stand by their convictions and use any share price weakness to build a bigger position. And that’s just what George Soros is doing with his investment in electronics retailer Best Buy (NYSE: BBY). Shares touched a new intra-day low on Monday, but Soros is holding firm. According to TickerSpy.com, he owns more than three million shares, and his last move was as a buyer of another 299,000 shares. Soros isn’t looking like much of a market timer these days, as shares of Best Buy have fallen by nearly -25% during the past three months. But the legendary fund manager is focused on an important basic fact. This retailer isn’t hurting from increased competition (and indeed now has far less competition with the demise of Circuit City). Instead, demand for consumer electronics has hit a flat spot thanks to a weak economy and a lack of compelling new consumer electronics to buy. That flat spot should come to an end in a few quarters, and Soros will likely end up with a… Read More