Shares of General Motors (NYSE: GM) were hit hard last month after the company missed analysts’ revenue expectations for the second quarter. The company reported earnings of $0.58 per share — which actually came in above consensus projections — but the 1% increase in automotive revenue raised a major red flag for investors. The day before General Motors released its Q2 numbers, the stock closed at $37.40. Today, investors are able to pick up shares at a 10% discount to that price. On a positive note, it appears that the stock may have… Read More

Shares of General Motors (NYSE: GM) were hit hard last month after the company missed analysts’ revenue expectations for the second quarter. The company reported earnings of $0.58 per share — which actually came in above consensus projections — but the 1% increase in automotive revenue raised a major red flag for investors. The day before General Motors released its Q2 numbers, the stock closed at $37.40. Today, investors are able to pick up shares at a 10% discount to that price. On a positive note, it appears that the stock may have found support as the stock hit a new post-earnings low on Friday, followed by a rally on Monday. While the disappointment in revenue is certainly worth taking note of, it is fair to say that General Motors has faced some tremendous challenges over the past few months, mainly relating to recalls of vehicles with faulty ignition switches. The bad press the company has received is certainly weighing on the company’s ability to sell cars, and yet GM was still able to post a year-over-year increase in automotive sales. Read More

Just ahead of Tesla Motors’ (NASDAQ: TSLA) earnings release on Thursday, I was defending the stock on the Fox Network, as other industry professionals doubted its ability to beat Wall Street’s estimates and turn into the biggest growth story since Apple (NASDAQ: AAPL).  As my critics lick their wounds after Thursday’s blowout earnings release, I’ve gotten even more excited about the stock, and I don’t care that it was up 4.5% Friday. In fact, I’m more bullish than ever on TSLA after hearing details from CEO Elon Musk. Today, I’m going to show you how to play this game-changing stock… Read More

Just ahead of Tesla Motors’ (NASDAQ: TSLA) earnings release on Thursday, I was defending the stock on the Fox Network, as other industry professionals doubted its ability to beat Wall Street’s estimates and turn into the biggest growth story since Apple (NASDAQ: AAPL).  As my critics lick their wounds after Thursday’s blowout earnings release, I’ve gotten even more excited about the stock, and I don’t care that it was up 4.5% Friday. In fact, I’m more bullish than ever on TSLA after hearing details from CEO Elon Musk. Today, I’m going to show you how to play this game-changing stock for much less money by using call options. #-ad_banner-#​An Industry Disruptor Not only do I think Tesla is changing the way we drive, but I firmly believe it will go down in the history books as a pillar of American industry, an amalgam of Apple, Exxon Mobil (NYSE: XOM) and Ford (NYSE: F) all rolled into one. Back in the late 19th century, the titans of American commerce used monopolies to gain extreme power. While Tesla might not monopolize electric cars, it is pretty darn close, controlling their ecosystem, competition, infrastructure, and to an extent, their destiny.   Initial naysayers… Read More

The bull market run in 2014 has not treated all equally. While the broad market S&P 500 is up 6.5% for the year, the Dow industrials have only eked out a 1.7% gain. If the bull continues its charge into 2015, the blue chips are likely to play catch up. One of the components that has held the Dow back is Wal-Mart Stores (NYSE: WMT), which is down almost 5% year to date. WMT has been largely bound by a range between $72 and $80 for the past year and a half. The stock is currently trading above… Read More

The bull market run in 2014 has not treated all equally. While the broad market S&P 500 is up 6.5% for the year, the Dow industrials have only eked out a 1.7% gain. If the bull continues its charge into 2015, the blue chips are likely to play catch up. One of the components that has held the Dow back is Wal-Mart Stores (NYSE: WMT), which is down almost 5% year to date. WMT has been largely bound by a range between $72 and $80 for the past year and a half. The stock is currently trading above solid support at $72, and I believe the risk/reward favors the bulls at these levels. An upside breakout through $80 resistance targets an $8 move to $88.  #-ad_banner-#​The $88 target is about 18% higher than recent prices, but traders who use a capital-preserving, stock substitution strategy could make more than 140% on a move to that level. One major advantage of using a long call option rather than buying a stock outright is putting up much less capital to control 100 shares — that’s the power of leverage. But with all of the potential… Read More

In today’s extended market, it is difficult to find quality investment ideas that haven’t already been bid up to premium valuations. The Federal Reserve has set target interest rates at historically low levels, which in turn, has forced yield-hungry investors out of fixed-income securities and into riskier equities. #-ad_banner-#For the most part, stocks that have pulled back to the point where they are trading at discount valuations have at least some issues that are concerning to investors. Today, we’re going to look at an income opportunity on a stock that has struggled but is trading at what appears… Read More

In today’s extended market, it is difficult to find quality investment ideas that haven’t already been bid up to premium valuations. The Federal Reserve has set target interest rates at historically low levels, which in turn, has forced yield-hungry investors out of fixed-income securities and into riskier equities. #-ad_banner-#For the most part, stocks that have pulled back to the point where they are trading at discount valuations have at least some issues that are concerning to investors. Today, we’re going to look at an income opportunity on a stock that has struggled but is trading at what appears to be a solid floor. This company offers exceptional value (if it is able to get its operations back in line), and after the stock’s decline, option premiums are high enough to give us a lucrative amount of income. Staples (Nasdaq: SPLS) has had a tough year so far. The stock lost roughly a third of its value from its late 2013 high and is off 60% from its all-time peak in 2006.  While the chart may not be much to look at, SPLS may be one of the few true value opportunities available to investors at this… Read More

The S&P 500 has gained more than 7% so far this year, and just made new highs on Wednesday. A move to 2,000 and beyond seems all but assured. #-ad_banner-#The massive bull market run makes long candidates more difficult to pick, as many stocks seem overextended and ripe for a pullback. But it’s hard to say when the correction will arrive, as the market has climbed relentlessly in the face of bad news. At this juncture, if you’re looking for outsized gains, it may be a smart move to go after lagging stocks, which arguably have less to… Read More

The S&P 500 has gained more than 7% so far this year, and just made new highs on Wednesday. A move to 2,000 and beyond seems all but assured. #-ad_banner-#The massive bull market run makes long candidates more difficult to pick, as many stocks seem overextended and ripe for a pullback. But it’s hard to say when the correction will arrive, as the market has climbed relentlessly in the face of bad news. At this juncture, if you’re looking for outsized gains, it may be a smart move to go after lagging stocks, which arguably have less to lose and more upside as the market plods higher. Sears Holdings (Nasdaq: SHLD) looks like a good candidate for this strategy. The stock has had a challenging 2014 and is down 22% this year. A channel from $32 to $44 has captured the majority of the price activity over the past 52 weeks. In recent months, the $38 midpoint of the range has held as support on a weekly basis, with a series of lower highs and higher lows signaling an impending breakout. The upside target is calculated by adding the $12 height of the trading range to the breakout… Read More

My years in the military have allowed me to see the world in a totally different way. While deployed overseas I tracked IED locations, went on convoy missions and gathered intelligence from local villages. I learned the importance of analyzing data to forecast what was likely to happen in the future, and I used this data and information to determine the level of risk our soldiers were dealing with. The typical mission was scheduled to take seven days, but always ended up taking longer due to roadside bombs and the occasional unruly hostile who decided to shoot at us. This… Read More

My years in the military have allowed me to see the world in a totally different way. While deployed overseas I tracked IED locations, went on convoy missions and gathered intelligence from local villages. I learned the importance of analyzing data to forecast what was likely to happen in the future, and I used this data and information to determine the level of risk our soldiers were dealing with. The typical mission was scheduled to take seven days, but always ended up taking longer due to roadside bombs and the occasional unruly hostile who decided to shoot at us. This has opened my eyes to see the bigger picture. Not just in the military, but in everyday life. I believe my experience assessing risk in the military allows me to think outside the box and take a different angle on a problem or situation.  In this case, it’s the financial markets. #-ad_banner-#Today, there is an onslaught of different investing techniques and strategies. And when I was first introduced to them, I found myself, like most, overwhelmed. That’s when my training came in handy, and I immediately looked at the market from a different angle. I was instantly drawn to a… Read More

Assured Guaranty (NYSE: AGO) is in the business of insuring bond offerings for corporations and municipalities. Not the most exciting stuff, but the bond insurance industry is relatively small with only a few key players. Essentially, these insurers put their stamp of approval on new bonds sold by companies or municipalities and agree to back the principle for creditors in the case of default. #-ad_banner-#For undertaking this risk, the insurance company is paid a premium (typically by the selling party), which represents a recurring income stream until the bond actually matures. Selling parties, such as… Read More

Assured Guaranty (NYSE: AGO) is in the business of insuring bond offerings for corporations and municipalities. Not the most exciting stuff, but the bond insurance industry is relatively small with only a few key players. Essentially, these insurers put their stamp of approval on new bonds sold by companies or municipalities and agree to back the principle for creditors in the case of default. #-ad_banner-#For undertaking this risk, the insurance company is paid a premium (typically by the selling party), which represents a recurring income stream until the bond actually matures. Selling parties, such as corporations, cities or counties, are willing to pay this premium because they can typically sell the bonds with a lower rate of interest because investors know that they are much more likely to receive their principal back at a bare minimum.  In addition to the spread between premiums received and claims paid out, insurance companies typically have a second major source of income. This income comes from returns on the massive amounts of capital that the insurance companies are required to hold as protection in the event that they are required to meet claims. Over the past several years, it… Read More

Editor’s Note: This article is one of our favorite “hall of fame” articles, originally published January 13, 2014. In this piece, Austin Hatley explains how Profitable Trading’s Amber Hestla uses a unique strategy to safely boost her income stream every month from blue-chip stocks like Microsoft. Due to timing differences, some of the original numbers listed in this article have changed, but you should still be able to get the gist of her strategy nonetheless. Right now you can earn big, double-digit “Instant Yields” from some of the safest stocks in the world. #-ad_banner-#For example, we’ve found yields as high… Read More

Editor’s Note: This article is one of our favorite “hall of fame” articles, originally published January 13, 2014. In this piece, Austin Hatley explains how Profitable Trading’s Amber Hestla uses a unique strategy to safely boost her income stream every month from blue-chip stocks like Microsoft. Due to timing differences, some of the original numbers listed in this article have changed, but you should still be able to get the gist of her strategy nonetheless. Right now you can earn big, double-digit “Instant Yields” from some of the safest stocks in the world. #-ad_banner-#For example, we’ve found yields as high as 9.9% from Coca-Cola (NYSE: KO)… 12.4% from AT&T (NYSE: T)… and even as much as 24.2% from software giant Microsoft (NYSE: MSFT). This isn’t some investment gimmick, either. The payouts I’m talking about are settled in cash. That is, every time you get one of these payments, the money is added to your brokerage account immediately. Take a gander at the incredible yields we’re finding from some of the market’s best-known stocks… At first glance, these payouts may seem impossible. After all, a quick look at Yahoo Finance tells us that all of the stocks listed above… Read More

It seems like nothing is ever on sale at high-end natural grocer Whole Foods Market (Nasdaq: WFM) — but what is on sale is the company’s stock.#-ad_banner-#​ Trading near $40 at the start of 2006, WFM plunged to the single digits in 2008, as investors questioned customers’ ability to pay premium prices for groceries. Emerging from the depths of the financial crisis, WFM’s trajectory was nearly straight up until peaking at its all-time high above $65 in October. The $40 level is an important pivot point, as it represents the midpoint of… Read More

It seems like nothing is ever on sale at high-end natural grocer Whole Foods Market (Nasdaq: WFM) — but what is on sale is the company’s stock.#-ad_banner-#​ Trading near $40 at the start of 2006, WFM plunged to the single digits in 2008, as investors questioned customers’ ability to pay premium prices for groceries. Emerging from the depths of the financial crisis, WFM’s trajectory was nearly straight up until peaking at its all-time high above $65 in October. The $40 level is an important pivot point, as it represents the midpoint of the price action from the past five years. When WFM pushed above this level in 2012, it became support. An earnings miss in early May sent shares cratering almost 20% in one day. Since then, WFM has traded sideways between $37 and $43. The first target for a price recovery is a retracement to the top of the trading range and the middle of the May gap down, near $44. The $44 target is about 17% higher than recent prices, but traders who use a capital-preserving stock substitution strategy could make 70% on a move to… Read More

Sales of new vehicles hit their fastest rate in almost eight years in June, rising to an annualized 17 million. Analysts had been expecting about 16.4 million units, and many are now boosting their forecasts for the second half of the year. Record auto sales are likely to fuel demand for related industries such as car parts and tires (as in my most recent trade). But one area that traders aren’t talking about much is insurance. When consumers purchase new cars, insurance premiums tend to increase because of the cost of the vehicle. Additionally, financed and leased vehicles… Read More

Sales of new vehicles hit their fastest rate in almost eight years in June, rising to an annualized 17 million. Analysts had been expecting about 16.4 million units, and many are now boosting their forecasts for the second half of the year. Record auto sales are likely to fuel demand for related industries such as car parts and tires (as in my most recent trade). But one area that traders aren’t talking about much is insurance. When consumers purchase new cars, insurance premiums tend to increase because of the cost of the vehicle. Additionally, financed and leased vehicles typically require elevated coverage. This equates to more revenue for insurance companies as long as claims don’t get out of control. GEICO is the undisputed king when it comes to growth. In 2013, the insurer saw auto premiums jump 11.3%, as it surpassed Allstate (NYSE: ALL) to become the country’s second largest insurer. State Farm, a mutual company owned by the policyholders who buy its insurance, is #1. Runner-up GEICO is a subsidiary of Berkshire Hathaway (NYSE: BRK-B), so we can’t invest directly in GEICO. As for Allstate, of the major auto insurers, it saw the lowest year-over-year increase in… Read More