During their baby phase, investors are totally in love with them. The newborn is absolutely perfect and the stockholders will coo and brag, and throw money at their pride and joy regardless of price. During the toddler phase, although the company may display poor behavior in not doing what it’s told and destroying everything in its path, including shareholder wealth, investors are still convinced they’ve got a real long-term winner. They forgive and shrug this phase off as just a part of growing up. As the company hits the elementary and middle school years, investors are still… Read More

During their baby phase, investors are totally in love with them. The newborn is absolutely perfect and the stockholders will coo and brag, and throw money at their pride and joy regardless of price. During the toddler phase, although the company may display poor behavior in not doing what it’s told and destroying everything in its path, including shareholder wealth, investors are still convinced they’ve got a real long-term winner. They forgive and shrug this phase off as just a part of growing up. As the company hits the elementary and middle school years, investors are still supportive — although not as forgiving as in the toddler years. Poor performance doesn’t go unpunished and the severity increases as the years progress. By the tumultuous high school and slacker college years, investors, like parents, often throw up their hands in frustration. The stock apparently can’t figure out what it wants to be or which direction its going. Sometimes, after this turbulent period, something wonderful often happens, but unfortunately many investors have lost patience and miss the metamorphosis. By this time, the company has grown into a mature, consistent, responsible adult. Giant chip maker Intel (Nasdaq:… Read More

This past week, two highly-respected investment publications opined that this stock is a top turnaround play. Barron’s touted that there is “hope, at last” in this name, even though its stock has fallen by more than 50% in the past decade to trail the S&P 500 and a number of archrivals badly. In this same period, the market is about flat, while rivals have returned between 75% and 150%. The Financial Times offered an analysis that was a bit more skeptical, but still concluded the CEO is making a big bet… Read More

This past week, two highly-respected investment publications opined that this stock is a top turnaround play. Barron’s touted that there is “hope, at last” in this name, even though its stock has fallen by more than 50% in the past decade to trail the S&P 500 and a number of archrivals badly. In this same period, the market is about flat, while rivals have returned between 75% and 150%. The Financial Times offered an analysis that was a bit more skeptical, but still concluded the CEO is making a big bet on “fresh growth” that relies on beefing up sales to emerging markets, reemphasizing key divisions that focus on infrastructure, and returning to research and development to drive innovation in the coming decade. Those statements are all well and good, but the historical numbers show that General Electric (NYSE: GE) has lost its way and needs a turnaround to return to the growth heyday it experienced while under the fearless leadership of Jack Welch. The truth is that current CEO Jeff Immelt has had an uphill battle since taking the helm in 2001, as Welch saddled… Read More

Many investors tend to focus on how a stock will fare in coming weeks and months. Company executives have a very different task. They need to stay focused on a much bigger picture, building a business that can grow for years to come. If investors push a stock down due to near-term issues, then executives have a clear move to make: Buy company shares while they’re not fully appreciated. Here are two stocks that have been pursued by insiders in recent weeks. Later on, I’ll give my take on whether or not they are compelling “buys”… Read More

Many investors tend to focus on how a stock will fare in coming weeks and months. Company executives have a very different task. They need to stay focused on a much bigger picture, building a business that can grow for years to come. If investors push a stock down due to near-term issues, then executives have a clear move to make: Buy company shares while they’re not fully appreciated. Here are two stocks that have been pursued by insiders in recent weeks. Later on, I’ll give my take on whether or not they are compelling “buys” right now… Rentrak (Nasdaq: RENT) When information and media-measuring firm Nielsen Holdings (Nasdaq: NLSN) pulled off an initial public offering (IPO) in January, many institutional investors gave the $10 billion (in market value) company a fresh look. But they may be wiser to give industry upstart Rentrak their attention instead. This $300 million company is slowly stealing business away from Nielsen and some analysts think the company can be an earnings powerhouse in a few years. If you came… Read More

Did you know the United States withholds a portion of dividends paid to many foreign investors? This amount comes right off the top, before the payment even hits an investor’s account. Even after this cut, the foreign investor will still have to pay taxes on what’s left. But the United States isn’t just being greedy. Just about every nation does something similar. Switzerland withholds up to 35% of dividends paid to foreign investors… Israel withholds up to 25%… Canada takes 15% off the… Read More

Did you know the United States withholds a portion of dividends paid to many foreign investors? This amount comes right off the top, before the payment even hits an investor’s account. Even after this cut, the foreign investor will still have to pay taxes on what’s left. But the United States isn’t just being greedy. Just about every nation does something similar. Switzerland withholds up to 35% of dividends paid to foreign investors… Israel withholds up to 25%… Canada takes 15% off the top. Typically the higher yields found abroad can make up the difference. For instance, the high yields on foreign utilities can still make them worthwhile to most investors, even with the withholding. And truth be told, you can get this withheld money back. Investors filing for a foreign tax credit via IRS Form 1116 can reclaim foreign dividends withheld. But you won’t receive this cash until you file your tax return, sometimes up to a year after the… Read More

From employment trends to factory production levels to trade figures, all signs are pointing to an improving U.S. economy. And in the early stages of any economic rebound, investors always flock to stocks with small market capitalizations. Back in 1990, when the economy was about to break out of its shell, the Russell 2000 Index, which focuses on small cap stocks, rose 100% during the next 36 months. These days, these small caps are back in vogue again. The Russell 2000 has risen… Read More

From employment trends to factory production levels to trade figures, all signs are pointing to an improving U.S. economy. And in the early stages of any economic rebound, investors always flock to stocks with small market capitalizations. Back in 1990, when the economy was about to break out of its shell, the Russell 2000 Index, which focuses on small cap stocks, rose 100% during the next 36 months. These days, these small caps are back in vogue again. The Russell 2000 has risen for seven of the last eight months. The index is now within just a few points of all-time highs hit back in 2007. Unlike blue chip stocks found in the S&P 500, smaller company stocks in the Russell 2000 tend to be much more volatile. Of course, that means even bigger gains in rising markets for some names. Right now, I’m taking a closer look at the hottest small caps, those Russell 2000 components that rose more than 50% in March. These sharp moves may be a harbinger of even better days ahead, or… Read More

By some estimates, the sum total of gold mined from the time of the ancient Egyptians through today would fit neatly into a 25-meter cube. That makes it pretty scarce. But for every 10 ounces of gold dug up from the ground, miners extract less than 1 ounce of platinum. And these precious metals are downright plentiful compared to promethium, a trace element that comprises just four parts per quintillion in naturally occurring ores. The entire global supply is thought to be a mere 500 grams — about the weight of a football. Read More

By some estimates, the sum total of gold mined from the time of the ancient Egyptians through today would fit neatly into a 25-meter cube. That makes it pretty scarce. But for every 10 ounces of gold dug up from the ground, miners extract less than 1 ounce of platinum. And these precious metals are downright plentiful compared to promethium, a trace element that comprises just four parts per quintillion in naturally occurring ores. The entire global supply is thought to be a mere 500 grams — about the weight of a football. Promethium is the rarest of the “rare earth metals,” a series of 17 obscure elements with unusual properties and valuable commercial applications. These metals aren’t exactly household names just yet. You might not even be able to pronounce ytterbium, let alone know what it’s used for. But if the combination of tight supplies and booming global demand intrigues you, then you’ll want to take a few minutes to familiarize yourself with this group. Because even after posting red-hot gains of 100% or more during the past year, stocks in this sector still have untold upside… Read More

The stock market continues to rack up nice gains. The S&P 500 rose 5.4% in the first quarter (after rising roughly 10% in each of the prior two quarters). If you’re keeping score, that first quarter gain was the best for the S&P 500 since 1998. Yet some stocks are missing out on all the fun. I’ve come across more than a dozen stocks in the S&P 500 that actually fell by 15% — or more — in the first quarter. These companies have suffered their own self-inflicted wounds, but in some cases, they are already on… Read More

The stock market continues to rack up nice gains. The S&P 500 rose 5.4% in the first quarter (after rising roughly 10% in each of the prior two quarters). If you’re keeping score, that first quarter gain was the best for the S&P 500 since 1998. Yet some stocks are missing out on all the fun. I’ve come across more than a dozen stocks in the S&P 500 that actually fell by 15% — or more — in the first quarter. These companies have suffered their own self-inflicted wounds, but in some cases, they are already on the mend. Let’s take a look at which ones are most likely to bounce back in the second quarter and beyond.   The fact that consumer-focused stocks such as RadioShack (NYSE: RSH), Urban Outfitters (Nasdaq: URBN), Target (NYSE: TGT), Best Buy (NYSE: BBY) and Carnival (NYSE: CCL) are likely to fare so poorly at a time of improving employment numbers is a bit curious. But if you dig a little deeper, you can start to see why. For example, Urban Outfitters delivered weak results for the all-important January quarter, and… Read More

Back in August 2009, the International Monetary Fund (IMF) released a report stating that a global economic recovery had begun to finally take hold following the credit crisis. Since that time, global economies have continued to recover and stock markets across the world have… Read More

Analysts love to grab headlines. And to do this, they often resort to their favorite ploy: The super-sized price target. So when analysts at Morgan Stanley predicted that GM (NYSE: GM) might eventually soar to $100, I and others sat up and took notice. Morgan Stanley’s analysts predicted that shares would start to build higher right away on the heels of yet-to-be-released fourth quarter results. To be fair, their $100 target was predicated on results several years into the future. But so far, this bold prediction looks like a dud. The stock is off 18%… Read More

Analysts love to grab headlines. And to do this, they often resort to their favorite ploy: The super-sized price target. So when analysts at Morgan Stanley predicted that GM (NYSE: GM) might eventually soar to $100, I and others sat up and took notice. Morgan Stanley’s analysts predicted that shares would start to build higher right away on the heels of yet-to-be-released fourth quarter results. To be fair, their $100 target was predicated on results several years into the future. But so far, this bold prediction looks like a dud. The stock is off 18% since we looked at this investment thesis, trading right around its 52-week low. Were the analysts flat wrong? Or were they simply premature? Let’s take a look…   In hindsight, the analysts overlooked one major point of concern: rising oil prices. GM, along with Ford (NYSE: F), remains highly dependent on pick-up trucks and SUVs for the bulk of profits. Generally speaking, the bigger the vehicle, the fatter the profit margin. Crisis in the Middle East has helped fuel an oil price spike, leading many to conclude that truck sales, which had… Read More

So far this year, there have been 28 initial public offerings (IPOs). Of these, seven are already up at least 20%. In fact, one IPO — Chinese Internet company Qihoo 360 (NYSE: QIHU) — surged 100%. The problem is that you probably weren’t able to get in on any of them. The reason is that IPOs are hot commodities on Wall Street and go to top clients such as wealthy investors and institutions. However, there is actually a clever way to participate in the upside. How? By investing in the top private equity… Read More

So far this year, there have been 28 initial public offerings (IPOs). Of these, seven are already up at least 20%. In fact, one IPO — Chinese Internet company Qihoo 360 (NYSE: QIHU) — surged 100%. The problem is that you probably weren’t able to get in on any of them. The reason is that IPOs are hot commodities on Wall Street and go to top clients such as wealthy investors and institutions. However, there is actually a clever way to participate in the upside. How? By investing in the top private equity firms that help bring many of these companies public. Essentially, private equity shops look for companies with strong cash flow and substantial barriers to entry. They will use lots of debt to buy the companies — hopefully at low valuations. A few years later, the private equity firms will take these companies public and often reap big returns. Take a look at the largest hospital operator in the United States, HCA (NYSE: HCA), which pulled off a $3.79 billion IPO in early March. The private equity backers behind the deal made a return of more than 250% from when… Read More