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

A nearly 2% pullback for the S&P 500 shouldn’t be of much concern.  The fact that index had risen for five straight months prior to the pullback suggests a bit of profit-taking was overdue. But it’s the violent nature of the late-month sell-off that has everyone’s attention. What first began as weakness in small caps is now spreading to mid- and large-cap stocks. The question on everyone’s mind: Is the market headed for more severe dips in the weeks and months ahead, or is this just back-filling on the way towards fresh new highs? To answer that question, let’s look… Read More

A nearly 2% pullback for the S&P 500 shouldn’t be of much concern.  The fact that index had risen for five straight months prior to the pullback suggests a bit of profit-taking was overdue. But it’s the violent nature of the late-month sell-off that has everyone’s attention. What first began as weakness in small caps is now spreading to mid- and large-cap stocks. The question on everyone’s mind: Is the market headed for more severe dips in the weeks and months ahead, or is this just back-filling on the way towards fresh new highs? To answer that question, let’s look at the market’s push and pull factors and see where they could lead us. In recent weeks, there has been some concern that the U.S. economy remains on unstable ground. In a few instances, we saw mention of a possible recession in the U.S. in coming quarters. That view seems way off the mark. A wide variety of reports suggests that the U.S. economy is poised for GDP growth in the 3% range of the second half of the year, and perhaps in 2014 as well. Key positives: Job growth remains robust, auto sales in July remained solid, and corporate… Read More

A few months ago, we told you about a little-known indicator that’s making a small group of investors a lot of money. We call this indicator the “Alpha Score”, because it consistently beats the market and often with less risk than buy-and-hold investing. It can flag exactly which stocks are… Read More

In a market like this, where it seems everyone is waiting for the other shoe to drop, investors need every advantage they can get. And one of the best ways to protect yourself: closely watch the world’s top investors — like hedge fund manager Jim Chanos, aka the “king of shorting.” #-ad_banner-#At the age of 57, Chanos earned this title by making short selling his preferred investing method, and he applies the strategy through his New York City-based hedge fund company Kynikos Associates (appropriately named since Kynikos means “cynic” in greek). Founded by Chanos in… Read More

In a market like this, where it seems everyone is waiting for the other shoe to drop, investors need every advantage they can get. And one of the best ways to protect yourself: closely watch the world’s top investors — like hedge fund manager Jim Chanos, aka the “king of shorting.” #-ad_banner-#At the age of 57, Chanos earned this title by making short selling his preferred investing method, and he applies the strategy through his New York City-based hedge fund company Kynikos Associates (appropriately named since Kynikos means “cynic” in greek). Founded by Chanos in the 1980s, the firm manages about $4 billion through a mix of short-only and combination long-short funds. Chanos first achieved global fame in 2001 when he made a killing on the collapse of former Wall Street darling Enron, a large U.S. energy firm that used accounting tricks and opaque financials to appear highly profitable for years but ultimately went bankrupt. During the financial crisis in 2008, when the market fell 37%, Chanos’ short-only fund Kriticos soared 59%. In the past year or so, Chanos has gained attention for shorting heavy equipment manufacturer Caterpillar (NYSE: CAT) and Canadian IT services firm… Read More

If you’re like most investors, then you probably repeatedly made the same mistake as you learned the rules of the game.  #-ad_banner-#You likely spotted a great bargain stock, bought shares and waited for something to happen. Shares likely stayed stuck at bargain levels, testing your patience. And you finally gave up waiting and sold shares, only to discover a year or two later that the stock did eventually rebound in a big way. What’s the lesson learned from that experience? That you should simply wait an indefinite period and stick around long enough for the eventual rebound? No. Such a strategy… Read More

If you’re like most investors, then you probably repeatedly made the same mistake as you learned the rules of the game.  #-ad_banner-#You likely spotted a great bargain stock, bought shares and waited for something to happen. Shares likely stayed stuck at bargain levels, testing your patience. And you finally gave up waiting and sold shares, only to discover a year or two later that the stock did eventually rebound in a big way. What’s the lesson learned from that experience? That you should simply wait an indefinite period and stick around long enough for the eventual rebound? No. Such a strategy will lead you to tie up all of your investor dollars in a bunch of dud stocks, leaving you with no funds to pursue new ideas. The better strategy: Create watch lists and track these stocks. Checking in on them frequently (I prefer daily) allows you to finally hop on board when these stocks start to become timely. Let me cite a few examples. Shares of Maxwell Technologies (Nasdaq: MXWL), a maker of ultra-capacitors, slumped sharply in the spring of 2012 as the company noted a slowdown in sales and a set of potentially fraudulent actions by some key… Read More

I have always enjoyed unearthing and profiting from unusual investments. From unique niche stocks to rare antiques, locating under-the-radar investments is part of my DNA. #-ad_banner-#Recently, I was reminded of one such unusual investment — Fifth Street Finance (Nasdaq: FSC) — by my colleague, Joseph Hogue, who covered it for our sister site, StreetAuthority.com. The stock appears to be setting up for a profitable trade and has a double-digit dividend yield to boot. This business development company (BDC) specializes in financing small and mid-sized companies. BDCs typically pays out most of their income in the form of dividends, and FSC… Read More

I have always enjoyed unearthing and profiting from unusual investments. From unique niche stocks to rare antiques, locating under-the-radar investments is part of my DNA. #-ad_banner-#Recently, I was reminded of one such unusual investment — Fifth Street Finance (Nasdaq: FSC) — by my colleague, Joseph Hogue, who covered it for our sister site, StreetAuthority.com. The stock appears to be setting up for a profitable trade and has a double-digit dividend yield to boot. This business development company (BDC) specializes in financing small and mid-sized companies. BDCs typically pays out most of their income in the form of dividends, and FSC currently pay $0.083 monthly for a 10.4% annual yield. The current environment makes commercial financing difficult for many businesses. A recent survey by the Federal Reserve showed that while demand for business loans was increasing, just 10% of banks were willing to decrease their lending criteria for small businesses, and 3% of banks increased their standards.  The stringent criteria of traditional banks and lending institutions open the door for alternative financing provided by business development companies like Fifth Street Finance.   FSC and other BDCs have struggled this year, in part because investors are worried about the effect of rising… Read More

Financial stocks have shown relative strength in recent weeks, and Tuesday’s rally in the sector on a jump in interest rates favors another leg higher. Among the best-looking bank stocks from a technical perspective is Bank of New York Mellon (NYSE: BK). #-ad_banner-#On Tuesday, BK rallied more than 2% and right back to a resistance line that dates back to late March. The stock now looks poised to break past this resistance for another leg higher. One of my early trading mentors told me to always have a watchlist of the big-name broker and banking stocks front and center to… Read More

Financial stocks have shown relative strength in recent weeks, and Tuesday’s rally in the sector on a jump in interest rates favors another leg higher. Among the best-looking bank stocks from a technical perspective is Bank of New York Mellon (NYSE: BK). #-ad_banner-#On Tuesday, BK rallied more than 2% and right back to a resistance line that dates back to late March. The stock now looks poised to break past this resistance for another leg higher. One of my early trading mentors told me to always have a watchlist of the big-name broker and banking stocks front and center to look for clues to the broader market’s direction.  In the longer term, banks facilitate credit and thus help spur the economy. And because the financial sector has the second-largest weighting in the S&P 500, it can impact the market on a daily and weekly basis. On an intraday basis, watching the financials can help you predict the day’s trend. If banks are weak in the first few hours of trading, then more often than not, the broader market has limited upside. Strength in the sector portends gains in the broader market.  On Tuesday, the broader market was weak in the… Read More

Intel (Nasdaq: INTC) made headlines last week when it raised its outlook for second-quarter and fiscal-year sales and gross margins.  The surprising news sent shares of INTC surging 7% on Friday, and it had a ripple effect across the so-called “old tech” sector, including Microsoft (Nasdaq: MSFT) and Hewlett-Packard (NYSE: HPQ).  Friday’s momentum put the wind at the bulls’ backs for the medium term. After peaking in August 2000 and then violently reverting to the mean, INTC spent the next 13 years treading water. Demand for its chips waned over the years as… Read More

Intel (Nasdaq: INTC) made headlines last week when it raised its outlook for second-quarter and fiscal-year sales and gross margins.  The surprising news sent shares of INTC surging 7% on Friday, and it had a ripple effect across the so-called “old tech” sector, including Microsoft (Nasdaq: MSFT) and Hewlett-Packard (NYSE: HPQ).  Friday’s momentum put the wind at the bulls’ backs for the medium term. After peaking in August 2000 and then violently reverting to the mean, INTC spent the next 13 years treading water. Demand for its chips waned over the years as the PC and laptop market became more saturated and mobile computing solutions like smartphones and tablets became more popular. Yet PCs and laptops remain a large part of both the corporate and home computing landscape, and eventually these machines need to be upgraded, creating demand for chips from Intel, software from Microsoft, and hardware from the likes of Hewlett-Packard.  I have seen countless situations where market participants expect a new technology to quickly make any existing technology in the space obsolete. This leads to an overvaluation of the new technology stocks and overselling of the old technology stocks.  More often… Read More

In the summer of 2012, this stock looked like yesterday’s news.  In less than a year, shares had crumbled from a high above $100 to $17, as traders jumped ship in advance of the company’s key patent expiring. They feared the market would be flooded with single-serve coffee brands. Yet, two years later, Keurig Green Mountain (Nasdaq: GMCR) and its K-Cups continue to reign supreme. And shares of the undisputed king of the single-serve coffee market are back in the triple digits and trading near their all-time highs. The competition still lags far behind, having penetrated only 13%… Read More

In the summer of 2012, this stock looked like yesterday’s news.  In less than a year, shares had crumbled from a high above $100 to $17, as traders jumped ship in advance of the company’s key patent expiring. They feared the market would be flooded with single-serve coffee brands. Yet, two years later, Keurig Green Mountain (Nasdaq: GMCR) and its K-Cups continue to reign supreme. And shares of the undisputed king of the single-serve coffee market are back in the triple digits and trading near their all-time highs. The competition still lags far behind, having penetrated only 13% of U.S. households. Keurig controls the other 87%, with an estimated 16 million of its coffee machines in U.S. homes. The company continues to grow by strategically partnering with major brands like Starbucks (Nasdaq: SBUX) and Dunkin’ Brands (Nasdaq: DNKN) to license its K-Cup technology. In its most recent quarter, sales of K-Cups increased 13% year over year, helping boost revenue 10% to $1.1 billion. Keurig recently inked a potentially mammoth deal — a 10-year partnership with Coca-Cola (NYSE: KO). Together the companies will produce Coca-Cola products in single-serve pods for the new Keurig… Read More

Whenever a stock is in the middle of a short squeeze, you can hop on board for quick gains. It’s certainly unwise to short such a stock while in this trading phase. But once the dust settles, and shorts have bought back a lot of stock, fresh opportunities may emerge to capture renewed downside. That appears to be the very straightforward setup for struggling retailer J.C. Penney (NYSE: JCP). Back in February, while shares were halfway through a rebound move from $5 to $9, I suggested you could profit from the short squeeze.  Three months later, this trading window has now… Read More

Whenever a stock is in the middle of a short squeeze, you can hop on board for quick gains. It’s certainly unwise to short such a stock while in this trading phase. But once the dust settles, and shorts have bought back a lot of stock, fresh opportunities may emerge to capture renewed downside. That appears to be the very straightforward setup for struggling retailer J.C. Penney (NYSE: JCP). Back in February, while shares were halfway through a rebound move from $5 to $9, I suggested you could profit from the short squeeze.  Three months later, this trading window has now closed. The size of the short position has shrunk from 128.5 million shares back then, to 91 million by the end of April, to 78 million by the middle of May — but don’t look for the short position to fall much further. A fresh view of quarterly results suggests there are ample reasons to suspect that the remaining shorts will stand their ground. Downside exists toward the all-time low of $4.90 a share. To see why that is, I should first make clear that J.C. Penney is no longer a candidate for bankruptcy, as many… Read More