Investor ratings can be a bit confusing… Confusing because they can be somewhat arbitrary. It’s not that they are fickle, per se. It’s just that different analysts place different weights on factors that could result in a vastly different rating. That said, ratings do have an effect on the markets, and they can give individual investor a sense of overall sentiment or trajectory. #-ad_banner-#I ran investor ratings through one of my favorite market screeners to find the top five U.S. stocks with a market cap higher than $10 billion. I then sorted them by trading ratings, followed by revenue growth,… Read More

Investor ratings can be a bit confusing… Confusing because they can be somewhat arbitrary. It’s not that they are fickle, per se. It’s just that different analysts place different weights on factors that could result in a vastly different rating. That said, ratings do have an effect on the markets, and they can give individual investor a sense of overall sentiment or trajectory. #-ad_banner-#I ran investor ratings through one of my favorite market screeners to find the top five U.S. stocks with a market cap higher than $10 billion. I then sorted them by trading ratings, followed by revenue growth, profitability and valuation. These top five companies beat out famous names like Amazon, Inc. (Nasdaq: AMZN), ranked 8th, Facebook, Inc. (Nasdaq: FB), ranked 18th, Google’s parent company Alphabet, Inc. (Nasdaq: GOOGL), ranked 31st, and China’s Baidu (Nasdaq: BIDU), ranked 32nd. Let’s take a look at them: 5. Raytheon Company (NYSE: RTN) With a five-star investor rating and a five-star trading rating, Raytheon boasts strong profitability. RTN develops and manufactures engineering technology for government and commercial uses, in sectors such as defense, IT and electronics. Analysts rate RTN as a very strong buy, and technical analysis indicates bullishness in both the… Read More

The current bull run in stocks has lasted longer than any other, save the tech bubble of the 90s.  That in itself shouldn’t be cause for alarm — bull markets don’t die of old age. What should worry investors, however, is the massive disconnect between economic fundamentals and stock valuations.  From weakening retail sales to corporate America heading for its sixth consecutive quarter of declining earnings, the fundamentals of the market conflict with the record highs we’re seeing nearly every day. But missing out on further upside isn’t an option for most investors either. #-ad_banner-#What to do when all the… Read More

The current bull run in stocks has lasted longer than any other, save the tech bubble of the 90s.  That in itself shouldn’t be cause for alarm — bull markets don’t die of old age. What should worry investors, however, is the massive disconnect between economic fundamentals and stock valuations.  From weakening retail sales to corporate America heading for its sixth consecutive quarter of declining earnings, the fundamentals of the market conflict with the record highs we’re seeing nearly every day. But missing out on further upside isn’t an option for most investors either. #-ad_banner-#What to do when all the data screams crash but the market keeps moving higher?  You find stocks that beat the market during a crash.  A Tale Of Two Worlds, Exuberant Markets Versus Dismal Economics Profit expectations have come down for the third quarter, which is likely to mark six consecutive quarters of falling earnings for companies in the S&P 500. The global economy is struggling and the only thing keeping the United States out of recession has been auto sales and housing. Auto sales are weakening and uncertainty around Brexit may be enough to push the United States into a recession over the next… Read More

It’s easy to like Warren Buffett. Despite amassing a nearly $66 billion fortune, he remains folksy and accessible. He’s not perfect — but then again, he’s also rarely wrong.  But one important thing to keep in mind when studying Warren Buffett is understanding that Buffett would not be where he is today without Charlie Munger, his business partner.  Munger may not be as famous as Buffett, but he has been instrumental in not only Berkshire Hathaway’s success — but also Buffett’s evolution as an investor. #-ad_banner-# Warren Buffett came up as a disciple of Ben Graham, the father of “value… Read More

It’s easy to like Warren Buffett. Despite amassing a nearly $66 billion fortune, he remains folksy and accessible. He’s not perfect — but then again, he’s also rarely wrong.  But one important thing to keep in mind when studying Warren Buffett is understanding that Buffett would not be where he is today without Charlie Munger, his business partner.  Munger may not be as famous as Buffett, but he has been instrumental in not only Berkshire Hathaway’s success — but also Buffett’s evolution as an investor. #-ad_banner-# Warren Buffett came up as a disciple of Ben Graham, the father of “value investing”. This can be basically defined as buying stocks trading for dirt-cheap valuations. And it was this approach that led Buffett’s investment partnership to acquire Berkshire Hathaway in 1965. Back then, Berkshire was a failing textile manufacturer. The stock was selling for around $7.50 per share, a major discount from the per-share working capital of $10.25 and book value of $20.20. Buffett also noticed that the company was using the proceeds from closing down some of its plants to repurchase shares.  So Buffett quietly began purchasing shares until Berkshire’s then-CEO issued a tender offer to buy back shares for $11.375. Read More

I’ve always had a soft spot for asset manager stocks, especially mutual fund managers. As an advisor/portfolio manager, I’ve been dealing with them on a daily basis for over two decades. Honestly, I don’t use a lot of mutual funds in my practice, but it’s a stylistic choice, not an indictment of the product.  That said, over the years I have owned a decent handful of mutual fund management company stocks. They can be great businesses and, in turn, great investments. I’ve written about asset managers off and on over the years. Here’s a piece from a few years back. … Read More

I’ve always had a soft spot for asset manager stocks, especially mutual fund managers. As an advisor/portfolio manager, I’ve been dealing with them on a daily basis for over two decades. Honestly, I don’t use a lot of mutual funds in my practice, but it’s a stylistic choice, not an indictment of the product.  That said, over the years I have owned a decent handful of mutual fund management company stocks. They can be great businesses and, in turn, great investments. I’ve written about asset managers off and on over the years. Here’s a piece from a few years back.  Recently, another asset manager has piqued my interest, primarily on a yield and valuation basis. Running $86.5 billion out of their Overland Park, KS headquarters, Waddell and Reed Financial (NYSE: WDR) has a fund complex and distribution model that merits a look. The stock has had a bit of a ride over the last few years, climbing over 200% only to give it all back. But it just might be time to get back in. Here’s why. #-ad_banner-#At its core, the asset management business is pretty simple, at least from a model standpoint. You take in… Read More

As technology progresses, sometimes it amazes me at how fast things become obsolete. I have two teenage sons. When they were pre-teens, Microsoft’s (Nasdaq: MSFT) Xbox game console was all the rage. New releases of ActivisionBlizzard’s (Nasdaq: ATVI) “Call of Duty” series were pre-ordered and eagerly anticipated. #-ad_banner-#It wasn’t that long ago, but it almost seems the gaming console platform is dead and gone, at least in our house. Most gaming done by my kids is handheld, whether on smartphone or tablet. When I hear Xbox generated gunfire and explosions coming from the back, I figure that they must be… Read More

As technology progresses, sometimes it amazes me at how fast things become obsolete. I have two teenage sons. When they were pre-teens, Microsoft’s (Nasdaq: MSFT) Xbox game console was all the rage. New releases of ActivisionBlizzard’s (Nasdaq: ATVI) “Call of Duty” series were pre-ordered and eagerly anticipated. #-ad_banner-#It wasn’t that long ago, but it almost seems the gaming console platform is dead and gone, at least in our house. Most gaming done by my kids is handheld, whether on smartphone or tablet. When I hear Xbox generated gunfire and explosions coming from the back, I figure that they must be feeling nostalgic. With the rise of digital payment systems, I get a bit nostalgic at times when it comes to physical banking, whether it’s making a deposit in the drive through of an actual branch, writing a check, or even using an ATM. Birthed in the mid 1960’s, the ATM has become a staple of the modern convenience life. However, it could go the way of the pay phone. So what does the future hold for Diebold, Inc. (NYSE: DBD), one of the world’s leading manufacturers of ATMs? Is the stock worth owning? On a price… Read More

It’s been a good couple of weeks for stock market bulls, at least if you follow economic indicators. First, we saw a marked uptick in consumer spending. Next, July business spending remained in expansion territory, despite dipping somewhat from its 16-month high in June. Although the headlines were gloomy — focusing on the low GDP number for the second quarter — there’s just as much reason to expect an increase in business spending as a decline in the coming months. #-ad_banner-#That said, with stock prices near all-time highs, investors need to exercise some caution lest they buy overvalued stocks that… Read More

It’s been a good couple of weeks for stock market bulls, at least if you follow economic indicators. First, we saw a marked uptick in consumer spending. Next, July business spending remained in expansion territory, despite dipping somewhat from its 16-month high in June. Although the headlines were gloomy — focusing on the low GDP number for the second quarter — there’s just as much reason to expect an increase in business spending as a decline in the coming months. #-ad_banner-#That said, with stock prices near all-time highs, investors need to exercise some caution lest they buy overvalued stocks that do nothing despite decent economic performance over the next 12 months. Fortunately, there remain plenty of companies to choose from with solid prospects in the near term and excellent long-term opportunities. One of these is General Electric (NYSE: GE).  GE is an iconic company with roots in classic American themes: innovation, ingenuity and industry. Its history is storied, and blue chips don’t come any bluer. But as I’ve said before, what’s most attractive about the stock is not its past, but its future. GE has restructured its business through spinoffs and acquisitions to again focus on innovation — and it… Read More

It seems like it should be a fairly straightforward concept. You invest your money in a company for a share of future earnings. Most of the companies in which I invest have been around for longer than I have, so those earnings should be fairly stable, if not following a gradual path higher. Of course, investing can be anything but simple as the market charts its course through the new normal and you are trying to avoid the next historic crash in prices. #-ad_banner-#So when someone starts talking about ‘simple’ math that makes an investment a no-brainer, I start to… Read More

It seems like it should be a fairly straightforward concept. You invest your money in a company for a share of future earnings. Most of the companies in which I invest have been around for longer than I have, so those earnings should be fairly stable, if not following a gradual path higher. Of course, investing can be anything but simple as the market charts its course through the new normal and you are trying to avoid the next historic crash in prices. #-ad_banner-#So when someone starts talking about ‘simple’ math that makes an investment a no-brainer, I start to wonder how simple it can really be. Especially when that someone is the CEO of the company. That was the case recently during an earnings release by one of the world’s largest asset managers. Not only is the lecturing mathematician the CEO, he’s also the co-founder of the company. I admire this CEO greatly and he’s a guru in the world of private equity, but when I looked further into the details I found a few holes in his ‘simple’ math.  While I don’t agree with the CEO’s math, I did find evidence that the stock could be one of… Read More

Times are good for America’s retailers. Retail sales hit a new record of $457 billion in June and are up 2.7% for the past 12 months, up from 2.2% year over year in May. The National Retail Federation recently increased its estimate for 2016 full-year retail sales growth to 3.4% from 3.1%. That’s healthy growth, especially given that inflation is practically zero. These numbers mean two things: one, U.S. employment growth is translating into greater spending power for U.S. consumers — and they are indeed spending rather than mostly saving, and two, companies that depend on U.S. consumer spending might… Read More

Times are good for America’s retailers. Retail sales hit a new record of $457 billion in June and are up 2.7% for the past 12 months, up from 2.2% year over year in May. The National Retail Federation recently increased its estimate for 2016 full-year retail sales growth to 3.4% from 3.1%. That’s healthy growth, especially given that inflation is practically zero. These numbers mean two things: one, U.S. employment growth is translating into greater spending power for U.S. consumers — and they are indeed spending rather than mostly saving, and two, companies that depend on U.S. consumer spending might perform better than recently expected in the coming quarters. #-ad_banner-#Note that I’m referring here to U.S. spending and U.S. retailers. That’s because in other parts of the world, retail sales aren’t rising quite as much if at all. Indeed, in the UK sales suffered their biggest decline in four years in the wake of the Brexit vote to leave the European Union. So while many U.S. retailers have some foreign exposure, and that doesn’t disqualify them as a potential investment, it makes sense to favor those more heavily exposed to the United States. These stocks appear attractive now and could… Read More

The truth will make you sick. Technically it’s public knowledge, but I can tell you — it’s Congress’ dirty little secret. #-ad_banner-#Congress is rich. Unbelievably rich. And until just recently, insider trading laws didn’t apply to Congress. So, what are the most popular stocks owned by Congress? I’ll tell you! I don’t know which is worse: The fact that insider trading was legal for some of our nation’s wealthiest politicians… or that Congress refused to do anything about it for decades.  “A few lawmakers proposed a bill that would prevent members and employees of Congress from trading securities based on… Read More

The truth will make you sick. Technically it’s public knowledge, but I can tell you — it’s Congress’ dirty little secret. #-ad_banner-#Congress is rich. Unbelievably rich. And until just recently, insider trading laws didn’t apply to Congress. So, what are the most popular stocks owned by Congress? I’ll tell you! I don’t know which is worse: The fact that insider trading was legal for some of our nation’s wealthiest politicians… or that Congress refused to do anything about it for decades.  “A few lawmakers proposed a bill that would prevent members and employees of Congress from trading securities based on nonpublic information they obtain. The legislation has languished since 2006,” according to The Wall Street Journal.  That was, the legislation languished until 60 Minutes — one of the most-respected investigative journalism programs on television — dedicated a segment to the issue. Here’s a portion of what they had to say…        “In mid-September 2008, with the Dow Jones Industrial Average still above 10,000, Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke were holding closed-door briefings with congressional leaders, and privately warning them that a global financial meltdown could occur within a few days. One of those… Read More

My friends all know that I’m not a new car buyer. I can’t rationalize the instant depreciation signing new car paperwork creates. It would probably keep me up at night. Recently, a client came to me dead set on buying a new Lexus ES. Then she asked my opinion. She wasn’t pleased with my answer, which ended with me saying “… a complete waste of money you and I have worked so hard together to preserve and grow.” It was clear she had made up her mind on a new car. So I suggested and alternative: why not by a… Read More

My friends all know that I’m not a new car buyer. I can’t rationalize the instant depreciation signing new car paperwork creates. It would probably keep me up at night. Recently, a client came to me dead set on buying a new Lexus ES. Then she asked my opinion. She wasn’t pleased with my answer, which ended with me saying “… a complete waste of money you and I have worked so hard together to preserve and grow.” It was clear she had made up her mind on a new car. So I suggested and alternative: why not by a brand new Toyota Avalon? It’s the same car. #-ad_banner-#Everyone knows that Lexus is the luxury brand of Toyota Motor Corp. (NYSE: TM). And, like their American counterparts, Toyota builds its brands on the same basic platform. A 2016 Lexus ES 350, built on the Avalon platform, has a base price of around $39,000. The Toyota Avalon has a base price of around $33,000. An 18% premium for basically the same automobile. Not a good way to deploy money. I’m also seeing similar behavior as equity markets grind higher. As markets hiccupped recently with the Brexit crisis, cautious investors who wanted… Read More