It’s often helpful to glance at the key moves made by hedge fund managers when in search of new investment ideas. And right now, many of these savvy investors are buying shares of a behind-the-scenes industrial play. The company in question: Macquarie Infrastructure Co. LLC (NYSE: MIC), which owns  a collection of assets primarily in the materials and energy sector. #-ad_banner-#Macquarie Infrastructure’s biggest asset is International-Matex Tank Terminals (IMTT), a company that owns and manages bulk liquid storage facilities on ports and railways. IMTT handles products like petroleum; renewable fuels; vegetable and animal oils; and other chemicals essential to everyday… Read More

It’s often helpful to glance at the key moves made by hedge fund managers when in search of new investment ideas. And right now, many of these savvy investors are buying shares of a behind-the-scenes industrial play. The company in question: Macquarie Infrastructure Co. LLC (NYSE: MIC), which owns  a collection of assets primarily in the materials and energy sector. #-ad_banner-#Macquarie Infrastructure’s biggest asset is International-Matex Tank Terminals (IMTT), a company that owns and manages bulk liquid storage facilities on ports and railways. IMTT handles products like petroleum; renewable fuels; vegetable and animal oils; and other chemicals essential to everyday life. While bulk liquid storage doesn’t sound like a high growth industry, the company has managed to grow revenue 10% and operating earnings (EBITDA) 11% annually over the last two years. In mid 2014, Macquarie acquired the other 50% of the business it didn’t already own, making it the crown jewel of Macquarie’s portfolio. The firm’s other assets include Hawaii Gas, which distributes natural and synthetic gas on the islands of Hawaii,  and Contracted Power and Energy, which owns controlling interests in five solar power generating facilities, a recently purchased gas-powered energy facility and two wind power generating… Read More

Turns in investor sentiment can make you double- and even triple-digit gains if you are early enough. The risk is being too early. The wait can be excruciating — and costly.  Just ask gold bugs.  Historic money printing by the largest central banks should have stoked inflation, deflating currencies and sending gold prices higher. And the 30% plunge in gold prices in 2013 should have led to production cuts and greater demand. Yet, gold prices have gone nowhere since the beginning of 2014. The wait for gold to rebound has led to big losses for many. SPDR Gold… Read More

Turns in investor sentiment can make you double- and even triple-digit gains if you are early enough. The risk is being too early. The wait can be excruciating — and costly.  Just ask gold bugs.  Historic money printing by the largest central banks should have stoked inflation, deflating currencies and sending gold prices higher. And the 30% plunge in gold prices in 2013 should have led to production cuts and greater demand. Yet, gold prices have gone nowhere since the beginning of 2014. The wait for gold to rebound has led to big losses for many. SPDR Gold Shares (NYSE: GLD) is nearly 11% off its 52-week highs, and the Market Vectors Gold Miners ETF (NYSE: GDX) is down 29% from its highs of the past year. #-ad_banner-# But for the leader in the space, this year may be a turning point. Better still, we can make double-digit returns even if the stock goes nowhere. Where are the Gold Bugs Now? Relative to the fervor for gold over the past several years, it seems you hardly hear pundits talk of the… Read More

Last week, I was surprised when my system designed to spot stocks on the verge of a breakout gave a buy signal for a stock in one of the most hated sectors of the market. It’s been a very long time since this dormant sector produced a buy candidate, but its boom-and-bust nature can produce huge winners. Subscribers to my premium Alpha Trader service rode one stock in this group to a 135% gain last year, making it our second largest winner. We are seeing green… Read More

Last week, I was surprised when my system designed to spot stocks on the verge of a breakout gave a buy signal for a stock in one of the most hated sectors of the market. It’s been a very long time since this dormant sector produced a buy candidate, but its boom-and-bust nature can produce huge winners. Subscribers to my premium Alpha Trader service rode one stock in this group to a 135% gain last year, making it our second largest winner. We are seeing green shoots sprout in the commodity-driven natural resource sector, and this could be the start of a long and persistent run in some very beaten-down stocks. Commodities are reflecting the nascent but aggressive pickup in inflation. The chained consumer price index (CPI) for all urban consumers showed a 1.2% rate of inflation from its January low, which annualizes to a 7.2% rate. This metric is considered to be a good representation of the general public because it accounts for nearly 90% of the population. Read More

A turnaround specialist can help to deliver huge returns for investors. By cutting costs or re-orienting a company into more appealing markets, a money loser can steadily morph into a money-maker. That’s been the hope for Lourenco Goncalves, who became CEO of beleaguered miner Cliffs Natural Resources, Inc. (NYSE: CLF) last summer. #-ad_banner-#Under his watch, the company’s per ton mining costs have fallen, he’s slashed general overhead (with corporate headcount falling from a peak of 338 to a recent 139), and Goncalves reduced the company’s exposure to global markets. The re-focused business is directed more squarely on North America, which… Read More

A turnaround specialist can help to deliver huge returns for investors. By cutting costs or re-orienting a company into more appealing markets, a money loser can steadily morph into a money-maker. That’s been the hope for Lourenco Goncalves, who became CEO of beleaguered miner Cliffs Natural Resources, Inc. (NYSE: CLF) last summer. #-ad_banner-#Under his watch, the company’s per ton mining costs have fallen, he’s slashed general overhead (with corporate headcount falling from a peak of 338 to a recent 139), and Goncalves reduced the company’s exposure to global markets. The re-focused business is directed more squarely on North America, which has better pricing dynamics. Moreover, a series of asset sales has enabled Cliff’s to pare debt by more than $1 billion in recent years. All of these factors have bought the company ample breathing room to sustain an eventual potential turnaround. Had this company not taken such bold action, Cliff’s might have already declared bankruptcy by now. Trouble is, those moves won’t help the stark reality of an industry that has too much supply and not enough demand. And shares of this miner, despite a recent mini-rebound (in an otherwise extended slump), may fall to just $1. That represents more… Read More

Spotting emerging trends in the market is the best way I have found to make oversized returns in equities. By getting ahead of market sentiment for a particular sector, idea or theme, you can take advantage of the herd mentality without being part of the herd. This quarter, and potentially for much of the year, I am looking for two major themes to develop.  The first is a cooling or even reversal of the U.S. dollar’s rally, which began in force late last year and continued through March.  The second theme, which is indirectly related to the first, is a… Read More

Spotting emerging trends in the market is the best way I have found to make oversized returns in equities. By getting ahead of market sentiment for a particular sector, idea or theme, you can take advantage of the herd mentality without being part of the herd. This quarter, and potentially for much of the year, I am looking for two major themes to develop.  The first is a cooling or even reversal of the U.S. dollar’s rally, which began in force late last year and continued through March.  The second theme, which is indirectly related to the first, is a stabilization of oil prices and improved sentiment in the space. Oil prices have bounced off their March lows, and near-term catalysts could help support them and bring investors back into the space. If even one of these two themes plays out, it could mean strong upside for today’s pick. If both themes develop, as they should, it could mean up to 56% returns for traders. Oil’s Rebound and Europe’s Turn for Growth The European Central Bank (ECB) was slow to adopt quantitative easing, the kind of bond-buying program that spurred growth in the United States, instead opting for… Read More

Bear markets are painful but necessary. They rid the market of the “irrational exuberance” that fuels asset bubbles and allows stock pickers to better separate the wheat from the chaff. Bear markets can also take place in specific sectors, as is happening right now in the energy market.  Yet in such lean times, the best companies can actually turn headwinds into tailwinds. That’s exactly what’s happening at Helmerich & Payne, Inc. (NYSE: HP). #-ad_banner-#H&P owns and operates one of the world’s largest fleets of drilling rigs (primarily land-based). The rigs are typically contracted out to exploration and production companies looking… Read More

Bear markets are painful but necessary. They rid the market of the “irrational exuberance” that fuels asset bubbles and allows stock pickers to better separate the wheat from the chaff. Bear markets can also take place in specific sectors, as is happening right now in the energy market.  Yet in such lean times, the best companies can actually turn headwinds into tailwinds. That’s exactly what’s happening at Helmerich & Payne, Inc. (NYSE: HP). #-ad_banner-#H&P owns and operates one of the world’s largest fleets of drilling rigs (primarily land-based). The rigs are typically contracted out to exploration and production companies looking to extract oil and gas from various shale formations in the United States. Like the rest of the sector, H&P is beginning to feel the effects of low energy prices. In its recent earnings report, the company saw a 1% decline in revenue to $883 million and 14% drop in net income to $150 million. Underlying these declines were shrinking active rig counts and falling dayrates, the daily amount H&P can charge for the use of its rigs. There was also a huge drop in utilization, or the percentage of active rigs contracted out. In Q2, utilization was just 68%,… Read More

What are the characteristics of good business leaders? Honesty, financial responsibility and a focus on rewarding shareholders are surely key attributes. In my mind, management acumen and integrity is probably the most overlooked  aspect that underpins a company’s success. Here’s a closer look at how bad management can sour your investment.    Freeport-McMoRan, Inc. (NYSE: FCX) is a $24 billion (in market value) diversified commodities producer. It owns copper and gold mines along with oil and gas properties. #-ad_banner-#The slump in both metals and oil prices has been a double whammy for this company, but commodity prices will fluctuate through… Read More

What are the characteristics of good business leaders? Honesty, financial responsibility and a focus on rewarding shareholders are surely key attributes. In my mind, management acumen and integrity is probably the most overlooked  aspect that underpins a company’s success. Here’s a closer look at how bad management can sour your investment.    Freeport-McMoRan, Inc. (NYSE: FCX) is a $24 billion (in market value) diversified commodities producer. It owns copper and gold mines along with oil and gas properties. #-ad_banner-#The slump in both metals and oil prices has been a double whammy for this company, but commodity prices will fluctuate through cycles. The key is how Freeport-McMoRan handled the slump, which has negatively impacted investors’ returns. In the first quarter of 2015, the company announced a huge write-down in the value of its oil and gas assets and announced it was considering selling or spinning parts of that division off to “unlock shareholder value.” The truth: the company’s foray into oil and gas was a disaster from the start. A decision to acquire McMoRan Exploration, a former subsidiary, was an unwise move. Even though crude oil prices were high in 2012, McMoRan Exploration was in trouble and running out of cash. Read More

Until less than a decade ago, there was no real need to address the forty-year ban on exporting crude oil from the United States. Over the 38 years to 2008, the country had seen an average annual decline of 1.7% in production and was only exporting a very small amount to Canada. That all changed with the shale drilling revolution as oil production jumped 74% to 8.68 million barrels a day over the six years through 2014. #-ad_banner-#Lifting the oil export ban in 2015 could add $1.8 trillion to our nation’s annual GDP, according to a 2014 study by NERA… Read More

Until less than a decade ago, there was no real need to address the forty-year ban on exporting crude oil from the United States. Over the 38 years to 2008, the country had seen an average annual decline of 1.7% in production and was only exporting a very small amount to Canada. That all changed with the shale drilling revolution as oil production jumped 74% to 8.68 million barrels a day over the six years through 2014. #-ad_banner-#Lifting the oil export ban in 2015 could add $1.8 trillion to our nation’s annual GDP, according to a 2014 study by NERA Economic Consulting, a nonpartisan consulting group. The resulting acceleration in economic growth could create an additional 230,000-to-380,000 jobs in the five years to 2020. With such strong benefits to the economy, why is it taking Washington so long to repeal the antiquated ban on crude exports? Besides environmentalists that argue lifting of the ban would result in higher domestic production, the fight to keep the ban in place is being fought by one industry, in particular, because it could mean disaster for its profitability. The industry may soon lose that fight and you might consider protecting your portfolio before it… Read More

For the past five years, investing in agricultural commodities has not been for the faint of heart. After rebounding quickly from the Great Recession on heavy demand from emerging markets, record harvests and slowing Chinese demand led to a general downtrend in prices, with volatile spikes in 2012 and 2014. This year, we’ve seen corn and wheat prices fall on an upgrade in production forecasts by the USDA and lowered expectations for export demand. Beyond strong expectations for this year’s harvest, a strong dollar is making U.S. crops relatively more expensive on the global market. But could this… Read More

For the past five years, investing in agricultural commodities has not been for the faint of heart. After rebounding quickly from the Great Recession on heavy demand from emerging markets, record harvests and slowing Chinese demand led to a general downtrend in prices, with volatile spikes in 2012 and 2014. This year, we’ve seen corn and wheat prices fall on an upgrade in production forecasts by the USDA and lowered expectations for export demand. Beyond strong expectations for this year’s harvest, a strong dollar is making U.S. crops relatively more expensive on the global market. But could this be a repeat of prior years when prices spiked due to higher demand or lower-than-expected supply? Beyond long-term catalysts to support prices, there are several near-term issues that could drive prices for corn and other grains higher this year.  Population Explosion Supports Grain Demand  It may have taken more than 200,000 years for the global population to reach 1 billion, but it took only 123 years to grow that number to 2 billion. In 2012, that number hit 7 billion, and the UN predicts we’ll add our next billion by 2026, a span of just 14 years. #-ad_banner-#Beyond the absolute… Read More

The great thing about the stock market is that it provides many ways for traders to express their opinions. And for all traders believing, as I do, that energy stocks are in the midst of a rebound, there are ways to participate that suit everyone’s convictions and risk tolerance. For those looking for total return — capital gains and dividends — a more stable big-cap name would be the right choice. #-ad_banner-#And for those who are a bit more contrarian and able to handle higher levels of risk, what could be better than a smaller stock in an extremely out-of-favor… Read More

The great thing about the stock market is that it provides many ways for traders to express their opinions. And for all traders believing, as I do, that energy stocks are in the midst of a rebound, there are ways to participate that suit everyone’s convictions and risk tolerance. For those looking for total return — capital gains and dividends — a more stable big-cap name would be the right choice. #-ad_banner-#And for those who are a bit more contrarian and able to handle higher levels of risk, what could be better than a smaller stock in an extremely out-of-favor subsector? Let’s dig in. The first stock is integrated international oil giant BP (NYSE: BP). The former British Petroleum is still feeling the stain on its reputation from the 2010 Deepwater Horizon disaster in the Gulf of Mexico, and its stock price reflects it. In fact, it trades well below where it was before the accident.  But there is good news in that the technicals now point to a short-term rally. I am not suggesting BP will head back to pre-incident highs, but it is poised to make up some ground relative to its sector and the market as… Read More