The Brexit selloff has turned to gains for the major indices, but a few sectors are still trading lower and with an air of uncertainty around unknown risks. In response to the uncertainty about the regional economy, trade and the ability to move workers easily investors are focusing on the negative consequences of the vote.  #-ad_banner-#One company in particular could see an upside in overall sales, as well as a higher market share in its business segment.  If the potential for stronger sales were not enough, shares are trading at a 35% discount to the long-term price multiple. Air Traffic… Read More

The Brexit selloff has turned to gains for the major indices, but a few sectors are still trading lower and with an air of uncertainty around unknown risks. In response to the uncertainty about the regional economy, trade and the ability to move workers easily investors are focusing on the negative consequences of the vote.  #-ad_banner-#One company in particular could see an upside in overall sales, as well as a higher market share in its business segment.  If the potential for stronger sales were not enough, shares are trading at a 35% discount to the long-term price multiple. Air Traffic Is Improving And Could Be Ready To Jump Ryanair Holdings (Nasdaq: RYAAY) is Europe’s largest airline by passenger traffic with service throughout the region, counting Britain as its single largest market. Shares plunged 17.6% after the Brexit vote and are still 19% off their 52-week high set in December.  Shares have tumbled despite strong passenger traffic growth. June traffic was up nearly one million passengers to 10.6 million compared to 9.5 million in June 2015 even after having to cancel hundreds of French flights due to a strike by air traffic controllers. The company’s load factor, the percentage of… Read More

Investors have always referred to underperforming stocks as dogs. One of history’s most well-known dividend value investing strategies is known simply as “the Dogs of the Dow”. With the recent re-pricing of energy stocks, primarily master limited partnerships (MLPs), I’ve gone in search of some real dogs. Here’s what I’ve found. Take a look at a chart of the Alerian MLP Exchange Traded Fund (NYSE: AMLP) Shares of this popular ETF track the performance of a basket of the most widely held energy MLPs traded. And as the energy sector crashed, no one was spared. The price of… Read More

Investors have always referred to underperforming stocks as dogs. One of history’s most well-known dividend value investing strategies is known simply as “the Dogs of the Dow”. With the recent re-pricing of energy stocks, primarily master limited partnerships (MLPs), I’ve gone in search of some real dogs. Here’s what I’ve found. Take a look at a chart of the Alerian MLP Exchange Traded Fund (NYSE: AMLP) Shares of this popular ETF track the performance of a basket of the most widely held energy MLPs traded. And as the energy sector crashed, no one was spared. The price of the fund was basically cut in half at the darkest point and, while AMLP has recovered by well over 50% it’s still trading at an attractive 21% discount to the 52-week high. In all, AMLP holds a basket of 24 different energy MLPs. On average, the top ten MLPs are trading at around a 21% discount to their 52-week highs. I decided to drill deeper. I identified the three names trading at the deepest discounts to their 52-week highs:   Discount To 52-Week High Yield MLPX LP (NYSE: MPLX) 48% 6.2% Plains All American Pipeline LP (NYSE: PAA) 38% 10.2% Williams Partners LP (NYSE: WPZ) 32%… Read More

With the pound at historic lows and economic uncertainty at its peak, it makes sense that financial institutions have been having a hard time in the wake of the Brexit. Deutsche Bank (NYSE: DB) is down over 21% and Barclays (NYSE: BCS) has plummeted nearly 32% since June 23. However, in this week’s Project Alpha I’m going to tell you about a small-cap financial services company that was hardly impacted by the Brexit. In fact its recent decision to redomicile, or move its location of incorporation from the United States to the UK, might actually improve… Read More

With the pound at historic lows and economic uncertainty at its peak, it makes sense that financial institutions have been having a hard time in the wake of the Brexit. Deutsche Bank (NYSE: DB) is down over 21% and Barclays (NYSE: BCS) has plummeted nearly 32% since June 23. However, in this week’s Project Alpha I’m going to tell you about a small-cap financial services company that was hardly impacted by the Brexit. In fact its recent decision to redomicile, or move its location of incorporation from the United States to the UK, might actually improve margins due to tax benefits.  #-ad_banner-#​Cardtronics (Nasdaq: CATM) is the no.1 deployer of non-bank ATMs in the world, and provides automated consumer financial services through its multi-function kiosks.  The firm currently operates over 190,000 devices globally for notable retailers and financial institutions including Target, 7-Eleven, CVS, Walgreens, Bank of America, Chase and Wells Fargo. These clients outsource their ATM functions to Cardtronics, which provides services such as machine maintenance, device branding and cash transportation and upkeep. The company’s ATMs are usually located in prominent and high-traffic locations, which creates three-sided network effects between financial institutions, consumers and retailers. Read More

The credit card was popularized in the United States in the 1950s, when Diners Club, Care Blanche and American Express created national — and then global — networks that allowed card holders to charge to a variety of merchants. Loyalty reward programs date back to at least the 1790s in the United States; they’ve remained popular throughout the centuries — from trading stamps through box tops to the present-day airline-style points programs. In the mobile digital age, when consumers have instant access to dozens of shopping options, loyalty is especially important. Consumer-facing companies now aim not only to attract purchases… Read More

The credit card was popularized in the United States in the 1950s, when Diners Club, Care Blanche and American Express created national — and then global — networks that allowed card holders to charge to a variety of merchants. Loyalty reward programs date back to at least the 1790s in the United States; they’ve remained popular throughout the centuries — from trading stamps through box tops to the present-day airline-style points programs. In the mobile digital age, when consumers have instant access to dozens of shopping options, loyalty is especially important. Consumer-facing companies now aim not only to attract purchases but to build networks of loyal customers. Online marketing programs are tailor-made for such efforts, as they allow companies to inexpensively reach customers with targeted appeals. #-ad_banner-#Today, many large retailers have their own credit cards; almost all consumer-facing companies have loyalty programs that reward customers who return to buy their products and services again and again; and almost all such companies also have multi-channel marketing efforts that include sophisticated online programs. One of the leading companies that help manage all of the above is Alliance Data Systems (NYSE: ADS). Alliance describes itself as “the engine” behind marketing and loyalty programs… Read More

To paraphrase the late, great Hunter S. Thompson, “When the going in Europe gets weird, the weird go to Switzerland”. And now, thanks to the Brexit vote, things are officially weird in Europe. Throughout history, whenever things got dicey in Europe, people with assets have always fled to the safety of Swiss banks and even the country itself. Where were the von Trapps from “The Sound of Music” going to escape the Nazis? Yep. Switzerland. And my guess is that Captain von Trapp had some cash stashed in Geneva as well. #-ad_banner-#So will the new Brexit-induced cracks in the EU… Read More

To paraphrase the late, great Hunter S. Thompson, “When the going in Europe gets weird, the weird go to Switzerland”. And now, thanks to the Brexit vote, things are officially weird in Europe. Throughout history, whenever things got dicey in Europe, people with assets have always fled to the safety of Swiss banks and even the country itself. Where were the von Trapps from “The Sound of Music” going to escape the Nazis? Yep. Switzerland. And my guess is that Captain von Trapp had some cash stashed in Geneva as well. #-ad_banner-#So will the new Brexit-induced cracks in the EU stimulate asset migration to Switzerland? I think so. Switzerland is not part of the European Union (EU) or the common euro currency. However, the country maintains a solid, cooperative relationship with the EU — and having a stable, standalone currency in the Swiss franc and a well-regulated, albeit private, banking system make Swiss banks an attractive option for fearful wealthy Europeans.  Of course, customer and asset flows also mean profits which are why investors should have a look at Swiss bank stocks right now. Here are two timely ideas. With a global financial services footprint, Credit Suisse Group (NYSE: CS)… Read More

The financial world’s reaction to the UK vote to leave the European Union was dramatic and understandable: a huge selloff in the British pound, big drops in most major stock markets and significant gains for U.S. government bonds. After all, voters in the world’s fifth-largest economy decided to remove it from the largest free-trade zone in the world. It’s hard to find an economist who thinks Brexit isn’t a huge mistake. The financial world’s reaction was exacerbated by surprise: despite polls showing a “Leave” victory was quite possible, conventional wisdom in the world’s financial centers was that voters would act rationally… Read More

The financial world’s reaction to the UK vote to leave the European Union was dramatic and understandable: a huge selloff in the British pound, big drops in most major stock markets and significant gains for U.S. government bonds. After all, voters in the world’s fifth-largest economy decided to remove it from the largest free-trade zone in the world. It’s hard to find an economist who thinks Brexit isn’t a huge mistake. The financial world’s reaction was exacerbated by surprise: despite polls showing a “Leave” victory was quite possible, conventional wisdom in the world’s financial centers was that voters would act rationally and remain in the EU, which benefits the UK economy far more than it harms it. #-ad_banner-#U.S. stocks lost about 5% in the first two days following the vote, which makes sense given the potential impact on the global economy — and the importance of the UK and Europe as U.S. trade partners. Stocks in the financial and manufacturing sectors were the hardest hit. Note that the fall comes after a solid period of performance for the overall market; Thursday’s close for the S&P 500 was close to its high for 2016. It’s highly unlikely that Brexit — as significant a… Read More

Shares of Valeant Pharmaceuticals (NYSE: VRX) plunged nearly 15% when the company finally reported its 1st quarter earnings on June 7  on a reduced 2016 outlook and a laundry list of other issues.  More than 100 million shares traded that day, five times the previous day’s volume, as investors rushed for the exit and short sellers danced a jig.  #-ad_banner-#But for those listening closely to the conference call, CEO Joseph Papa dropped a bombshell and tipped investors off to what could be one of the best positioned companies for the foreseeable future.  Most investors didn’t catch it because shares of… Read More

Shares of Valeant Pharmaceuticals (NYSE: VRX) plunged nearly 15% when the company finally reported its 1st quarter earnings on June 7  on a reduced 2016 outlook and a laundry list of other issues.  More than 100 million shares traded that day, five times the previous day’s volume, as investors rushed for the exit and short sellers danced a jig.  #-ad_banner-#But for those listening closely to the conference call, CEO Joseph Papa dropped a bombshell and tipped investors off to what could be one of the best positioned companies for the foreseeable future.  Most investors didn’t catch it because shares of this market leader closed just 0.6% higher on the day. This company is already a powerhouse in a growing industry and about to close a merger that will cement its place on top. Who Will Control Tomorrow’s Healthcare Valeant investors were stunned when the company reported that it was selling some drugs through its relationship with Walgreens Boots Alliance (Nasdaq: WBA) at a loss to its own costs. The advantage came to Walgreens on activity-based fees negotiated in the distribution contract, which are additional fees Walgreens receives on Valeant drugs depending on whether the purchase is paid in cash… Read More

I have to be very careful admitting this to my granola-crunching friends in Austin, but I genuinely love Monsanto (NYSE: MON). I always have. I know these hippie environmentalists have issues with the agriculture giant, but regardless of whatever Beardo the Weirdo thinks, I can tell you from my stewardship of a few acres of farm ground that Monsanto products are top notch. We don’t only grow crops, we raise cattle, and that means our water quality is something I keep a close watch on. It’s good — I test it myself four times a year, which… Read More

I have to be very careful admitting this to my granola-crunching friends in Austin, but I genuinely love Monsanto (NYSE: MON). I always have. I know these hippie environmentalists have issues with the agriculture giant, but regardless of whatever Beardo the Weirdo thinks, I can tell you from my stewardship of a few acres of farm ground that Monsanto products are top notch. We don’t only grow crops, we raise cattle, and that means our water quality is something I keep a close watch on. It’s good — I test it myself four times a year, which we’ve done since the 1960s. We’ve never been cleaner. #-ad_banner-# I’ve personally planted millions of Monsanto’s patented Genuity soybean seeds. You don’t realize how big a section of ground is until you start planting it in 30-foot wide rows… I’ve also sprayed the young plants with Monsanto’s RoundUp (which doesn’t kill them but obliterates weeds) and then personally watched the meter on the combine register in the stratosphere as I harvested them. It’s a dusty operation each fall, as the soybeans are cut only an inch or so off the ground. But it’s also a… Read More

In an article in the Harvard Business Review (HBR), former BP plc (NYSE: BP) CEO Lord John Browne said, “Purpose is the litmus test of sustainability in business. Companies that want to be around for decades to come must ensure that society is at the heart of everything they do.” That’s purpose, not profits… and that stands everything we expect from business on its head. #-ad_banner-#Well, almost everything. “Corporate Social Responsibility” (CSR) has been a big buzzword for a while now. The problem is, according to Browne, CSR is more of a lip service and morale booster than a catalyst… Read More

In an article in the Harvard Business Review (HBR), former BP plc (NYSE: BP) CEO Lord John Browne said, “Purpose is the litmus test of sustainability in business. Companies that want to be around for decades to come must ensure that society is at the heart of everything they do.” That’s purpose, not profits… and that stands everything we expect from business on its head. #-ad_banner-#Well, almost everything. “Corporate Social Responsibility” (CSR) has been a big buzzword for a while now. The problem is, according to Browne, CSR is more of a lip service and morale booster than a catalyst for improving society… (In most cases, that is. We’ll get to more about this in a minute.) In other words, CSR allows a company to feel good about doing less bad. Does your company recycle? Grand! Does it donate time and money to community causes? Grand! But that’s not enough. In a recent NPR interview, Browne said: While corporate social responsibility was a very well meaning and worthy thing to have started, it no longer serves a useful purpose in that it is detached from the basics of a business, and it is something, which in the words of one… Read More

For the first half of this year, pundits and investors alike have been wringing their hands in anticipation of the Federal Reserve raising its benchmark Fed funds rate another quarter of a percent. But indications are strong that Fed Chair Yellen isn’t going to pull the trigger at the June meeting like she did in December of 2015. Seems like investors dodged that bullet, right?  Wrong. Rates are going to go up on their own without any help from the Fed. Over the last five years, the yield on the 10-year U.S. Treasury, the benchmark for… Read More

For the first half of this year, pundits and investors alike have been wringing their hands in anticipation of the Federal Reserve raising its benchmark Fed funds rate another quarter of a percent. But indications are strong that Fed Chair Yellen isn’t going to pull the trigger at the June meeting like she did in December of 2015. Seems like investors dodged that bullet, right?  Wrong. Rates are going to go up on their own without any help from the Fed. Over the last five years, the yield on the 10-year U.S. Treasury, the benchmark for all interest rates, rose an average of 11.2% during the month of June. Here’s proof. Will this year be any different? Five years straight is a strong indicator. And although of late equity markets have been a little weak, which will keep yields low due to investors fleeing to “safety”, the evidence is still strong for an organic rise in rates. Why did rates rise? The Fed only intervened once during the time period, and that wasn’t until December of 2015. Maybe we should blame the U.S. dollar. Here’s a five year study of… Read More