Phew! The stock market recently has calmed down after a highly volatile first six weeks of 2016. While we may not be out of the woods, the sky-is-falling panic seems to have been overblown. Let’s use this breather to review three recommendations from late last year and assess if they’re still worthy. Boeing (NYSE: BA), which I recommended in December, has fallen sharply since then, for two reasons. First, investors’ rising concerns about economic growth in China and India led them to dump Boeing, which expects strong demand for commercial aircraft from those countries for years to come. Second, the… Read More

Phew! The stock market recently has calmed down after a highly volatile first six weeks of 2016. While we may not be out of the woods, the sky-is-falling panic seems to have been overblown. Let’s use this breather to review three recommendations from late last year and assess if they’re still worthy. Boeing (NYSE: BA), which I recommended in December, has fallen sharply since then, for two reasons. First, investors’ rising concerns about economic growth in China and India led them to dump Boeing, which expects strong demand for commercial aircraft from those countries for years to come. Second, the U.S. Securities & Exchange Commission last week announced that it was looking into Boeing’s use of “program accounting” methods for its 747 and 787 Dreamliner lines. While the SEC may decide there’s no problem, the cloud cast over the company led to another selloff. #-ad_banner-#In my view, both issues are legitimate concerns, but ones to which the market overreacted. China and India are not in or near recessions; they remain in strong growth modes, albeit slower than expected. Their orders for commercial aircraft are booked years in advance and are not expected to slow considerably as a result of their… Read More

U.S. stocks are attempting to recover from their January swoon, albeit with high volatility and no shortage of down days. The correction may not be over, I’ve noticed some solid signs that indicate we might not be headed into an extended bear market. #-ad_banner-#One encouraging sign is the strong performance of consumer discretionary stocks. In contrast to consumer staples companies — the must-have-it products like food and toilet paper — consumer discretionary companies sell products and services that consumers can defer purchasing in uncertain times: cars, washing machines and amusement park tickets, to name a few. When investors fear a… Read More

U.S. stocks are attempting to recover from their January swoon, albeit with high volatility and no shortage of down days. The correction may not be over, I’ve noticed some solid signs that indicate we might not be headed into an extended bear market. #-ad_banner-#One encouraging sign is the strong performance of consumer discretionary stocks. In contrast to consumer staples companies — the must-have-it products like food and toilet paper — consumer discretionary companies sell products and services that consumers can defer purchasing in uncertain times: cars, washing machines and amusement park tickets, to name a few. When investors fear a recession, consumer staples stocks tend to outperform consumer discretionary stocks. But when the latter rally, it’s a strong sign that the consensus thinks the economy will be at least okay for the foreseeable future — and that consumers will have extra cash in their wallets. Currently, that seems to be the case — and for good reason. U.S. unemployment fell in January to 4.9%, an eight-year low. And average weekly earnings have risen 2.5% over the past 12 months. While not dramatic, it’s a notable improvement after years of stagnation. Employers across the country are reporting an increase in wage… Read More

This might be a controversial viewpoint, but I love boring investments. Of course, “boring” is a relative term. These stocks may not be on the frontline of streaming media delivery or cloning. So, from that point of view, yeah, some people might consider them boring. But I don’t find getting yields 186% higher than the 10-year U.S. Treasury or earnings that are as dependable as a Timex watch boring. To me, those qualities are dead sexy. #-ad_banner-#Thanks to the market correction, I’ve found three high quality, high yield stock bargains. All three names are considered cyclical stocks, which  typically advance… Read More

This might be a controversial viewpoint, but I love boring investments. Of course, “boring” is a relative term. These stocks may not be on the frontline of streaming media delivery or cloning. So, from that point of view, yeah, some people might consider them boring. But I don’t find getting yields 186% higher than the 10-year U.S. Treasury or earnings that are as dependable as a Timex watch boring. To me, those qualities are dead sexy. #-ad_banner-#Thanks to the market correction, I’ve found three high quality, high yield stock bargains. All three names are considered cyclical stocks, which  typically advance ahead of a rebound. That makes this a great time to pick up these shares. Pick Up These Shares Before The Rebound Thanks to fears of a weak global economy, shares of International Paper Co. (NYSE: IP), the world’s largest paper and forest products company, have tumbled nearly 40% from their 52-week high. For value shoppers, this pushes valuation metrics down and yields up with the forward P/E at a low 10.3 and a dividend yield of 5.1%. Over the last decade, the company has slowly unwound its office paper business and focused its energy on packaging. The result… Read More

The mini-rally in stocks at the end of January has turned back into a full-blown selloff and investors are once again wondering if the seven-year bull market has run its course. Oil prices continue to crash lower and few are left touting the future of America’s revolution in energy production.  Stocks in the S&P 500 have fallen more than 14% from their 52-week high — now well past a correction and approaching the 20% bear market signal as fourth quarter earnings give investors little to cheer.  #-ad_banner-#But we’ve been here before. Several times in fact. There have been three other… Read More

The mini-rally in stocks at the end of January has turned back into a full-blown selloff and investors are once again wondering if the seven-year bull market has run its course. Oil prices continue to crash lower and few are left touting the future of America’s revolution in energy production.  Stocks in the S&P 500 have fallen more than 14% from their 52-week high — now well past a correction and approaching the 20% bear market signal as fourth quarter earnings give investors little to cheer.  #-ad_banner-#But we’ve been here before. Several times in fact. There have been three other corrections of 10% or more since 2009. And in their despair, investors are overlooking some powerful catalysts that could take shares back up and beyond old highs.  And I think it looks especially likely that this will happen in two of the hardest-hit sectors. Is The Bull Market Stampede Officially Over? Corporate earnings are set to decline for three consecutive quarters, a trend not seen since 2009, and reported sales are down for four straight quarters according to FactSet Research. Slowing growth from China and the near collapse of the energy sector have got investors worried that the bull… Read More

I used to be a notorious Apple (Nasdaq: AAPL) hater. From the roll out of the first overpriced iPhone, I’d look for any opportunity to rile up the fan boys. I’d yell at the television when they’d show file footage of the legions of fans standing in line at the Manhattan Apple store. I wrote bear cases for the stock.  That was then. This is now. I’ve grown up and so has Apple. And I believe it should be a core holding in your equity portfolio. #-ad_banner-#​Apple Is A Huge Bargain At Current Prices Simply… Read More

I used to be a notorious Apple (Nasdaq: AAPL) hater. From the roll out of the first overpriced iPhone, I’d look for any opportunity to rile up the fan boys. I’d yell at the television when they’d show file footage of the legions of fans standing in line at the Manhattan Apple store. I wrote bear cases for the stock.  That was then. This is now. I’ve grown up and so has Apple. And I believe it should be a core holding in your equity portfolio. #-ad_banner-#​Apple Is A Huge Bargain At Current Prices Simply defined, a stock’s margin of safety is the difference between the intrinsic value of a stock and its market price. For example, if you determine that a stock’s intrinsic value is $10 per share and your purchase price is $7 per share, you’re getting $3 worth of upside and enough cushion if the intrinsic value of the stock winds up being $9. This valuation method was pioneered by Warren Buffett’s mentor, Benjamin Graham; the godfather of securities analysis. The concept of margin of safety is the foundation of Berkshire Hathaway’s (NYSE: BRK-A) investment process. AAPL would totally fall under their… Read More

The market’s ups and downs this year show no sign of abating — in fact, S&P 500 volatility is in a strong uptrend that may continue for some time. Until calm prevails, a smart investor’s best bet is to pick up shares of stocks that have been unfairly beaten down and use their high quality to ride out the waves. Of course, such a strategy takes some fortitude and patience. A few weeks of high volatility, including nausea-inducing market drops of several percentage points a day, can seem like years. But a few months from now, we may well look… Read More

The market’s ups and downs this year show no sign of abating — in fact, S&P 500 volatility is in a strong uptrend that may continue for some time. Until calm prevails, a smart investor’s best bet is to pick up shares of stocks that have been unfairly beaten down and use their high quality to ride out the waves. Of course, such a strategy takes some fortitude and patience. A few weeks of high volatility, including nausea-inducing market drops of several percentage points a day, can seem like years. But a few months from now, we may well look back at the prices created by this correction and wonder why we didn’t buy more. #-ad_banner-#In recent months, I’ve pointed out many high-quality bargain stocks — market leaders with strong brands, rock-solid balance sheets, robust cash flows and other sterling qualities. Some have performed well; others are testing our patience. Let’s take a look at how three of them have performed — and whether or not they remain “Buys” today. 3M (NYSE: MMM), which I profiled here, has rallied impressively from its January lows and has performed fairly steadily even on major down days in the market. I expect the… Read More

When M&A specialist BC Partners took PetSmart Inc. private nearly a year ago, investors lost a top entree into the $60-billion pet products and services market. As a publicly traded entity, PetSmart showed strong growth and market leadership, and I’m certain it would have remained an excellent long-term investment if BC Partners hadn’t snapped it up. But with PetSmart out of the picture, those looking for a pure play on the pet care boom have much slimmer pickings. For example, despite a 4.5% dividend yield, I’m not a huge fan of nationwide pet pharmacy PetMed Express (Nasdaq: PETS) because its… Read More

When M&A specialist BC Partners took PetSmart Inc. private nearly a year ago, investors lost a top entree into the $60-billion pet products and services market. As a publicly traded entity, PetSmart showed strong growth and market leadership, and I’m certain it would have remained an excellent long-term investment if BC Partners hadn’t snapped it up. But with PetSmart out of the picture, those looking for a pure play on the pet care boom have much slimmer pickings. For example, despite a 4.5% dividend yield, I’m not a huge fan of nationwide pet pharmacy PetMed Express (Nasdaq: PETS) because its business has stagnated and total returns from its stock have been trailing the S&P 500’s by a wide margin for years. #-ad_banner-#PetMed has the right idea, though, by being in the pet health market, where affluent consumers are increasingly willing to pay up for expensive tests and treatments. In that environment, PetMed might still be expanding if it was casting a wider net, like VCA Inc. (Nasdaq: WOOF). While not a household name, VCA is quite large, with a $4-billion market cap that’s 12 times larger than PetMed Express’s. And it’s taking full advantage of the growth opportunities available in… Read More

I love to read stories about the rise and fall of business ventures. Not only are they entertaining, but these case studies can also reveal some important investing insights.  One in particular that has stuck with me over the years is the tale of Greyhound Bus Lines. Back in 1994, the transportation company was running on fumes. It had recently made the difficult decision to raise fares, which didn’t sit well with customers. Passenger volume was declining sharply, taking a heavy toll on revenues and earnings.  #-ad_banner-#Even more troubling, there was an ongoing feud between management and labor. Bus drivers… Read More

I love to read stories about the rise and fall of business ventures. Not only are they entertaining, but these case studies can also reveal some important investing insights.  One in particular that has stuck with me over the years is the tale of Greyhound Bus Lines. Back in 1994, the transportation company was running on fumes. It had recently made the difficult decision to raise fares, which didn’t sit well with customers. Passenger volume was declining sharply, taking a heavy toll on revenues and earnings.  #-ad_banner-#Even more troubling, there was an ongoing feud between management and labor. Bus drivers had already walked off the job a few years earlier in a lengthy strike. The two sides eventually reached a delicate agreement, but tensions were starting to flare again.  These issues created quite a bit of anxiety for investors. But the market really panicked when credit rating agency Standard & Poor’s downgraded the firm’s debt to “CCC,” a level indicating high risk of default and bankruptcy. Greyhound shares plummeted as low as $1.50, and the outlook was grim. About that same time, a small group of investors dug into the financial statements and saw something that the crowd had missed… Read More

After stumbling badly on negative publicity about foodborne illness at some of its restaurants, the fast casual dining industry’s once unstoppable frontrunner finally caught a break: On February 1, the Centers for Disease Control and Prevention (CDC) declared Chipotle Mexican Grill (NYSE: CMG) free of the nasty E. coli bug responsible for the illness outbreak. #-ad_banner-#During the summer and fall of last year, the outbreak affected five dozen Chipotle customers in 11 states, prompting the temporary shut-down of 43 of the chain’s locations. The situation has run its course, the CDC concluded, because no new cases have been reported since… Read More

After stumbling badly on negative publicity about foodborne illness at some of its restaurants, the fast casual dining industry’s once unstoppable frontrunner finally caught a break: On February 1, the Centers for Disease Control and Prevention (CDC) declared Chipotle Mexican Grill (NYSE: CMG) free of the nasty E. coli bug responsible for the illness outbreak. #-ad_banner-#During the summer and fall of last year, the outbreak affected five dozen Chipotle customers in 11 states, prompting the temporary shut-down of 43 of the chain’s locations. The situation has run its course, the CDC concluded, because no new cases have been reported since December 21. Besides sullying Chipotle’s reputation for safely providing “food with integrity,” the outbreak is wreaking havoc on the company’s stock and financials. Shares of Chipotle fell more than 40% since the news broke, and its latest quarterly report can only be described as ugly. Plus, there’s still fallout from a couple other recent outbreaks with another foodborne microbe (norovirus) involving single Chipotle locations in California and Massachusetts. Yet this all amounts to what may well be the best value opportunity of the year. To be sure, it will take time for Chipotle to mend fences… Read More

As a business strategy, selling to your softball teammates really isn’t the best way to optimize profits.  But that’s exactly how things got done in the prairie climes of Alberta, Canada, where I grew up.  #-ad_banner-#In fact, a lot of start-up companies get launched around my hometown. They’re mostly from the oil patch, which is a multi-billion dollar business in that part of the world.  Of course, many of these are big-scale ventures — drilling companies with large fleets of rigs or oil exploration companies that control thousands of acres. Then there’s the law firms, accountancies and human resources conglomerates… Read More

As a business strategy, selling to your softball teammates really isn’t the best way to optimize profits.  But that’s exactly how things got done in the prairie climes of Alberta, Canada, where I grew up.  #-ad_banner-#In fact, a lot of start-up companies get launched around my hometown. They’re mostly from the oil patch, which is a multi-billion dollar business in that part of the world.  Of course, many of these are big-scale ventures — drilling companies with large fleets of rigs or oil exploration companies that control thousands of acres. Then there’s the law firms, accountancies and human resources conglomerates that support them. But, surprisingly, there’s also room in this landscape for a totally different type of firm. Amid the giant corporations that move to town to pump every drop they can from the wells they pay dearly for, mom-and-pop businesses often begin popping up. They sell special sand to drilling companies for use in “fracking” procedures. They sell specialty chemicals to exploration firms to aid in the development of effective drilling fluids.  There’s even an entire sector of oil field services known as “hot shots” — which consists of drivers who are ready, at a moment’s notice night or… Read More