Scientists and environmentalists have been talking about climate change for more than a decade, but the topic has thus far had minimal impact on our daily lives.   That is until the last few years, as an historic drought has spread across most of California. More than two-thirds of the state is in “extreme” drought conditions as it enters its fourth year of low rainfall. Regulators have recently instituted the first-ever mandatory cuts to water usage for residential and commercial customers. The problem may not be California’s alone. Elsewhere in the United States, and around the globe, water crises have… Read More

Scientists and environmentalists have been talking about climate change for more than a decade, but the topic has thus far had minimal impact on our daily lives.   That is until the last few years, as an historic drought has spread across most of California. More than two-thirds of the state is in “extreme” drought conditions as it enters its fourth year of low rainfall. Regulators have recently instituted the first-ever mandatory cuts to water usage for residential and commercial customers. The problem may not be California’s alone. Elsewhere in the United States, and around the globe, water crises have begun to emerge with increasing frequency. Might we all be subject to wide-scale water rationing one day? Even if we don’t experience the nightmare desert scenes portrayed in so many post-apocalyptic movies, we will surely need more efficient monitoring and treatment of our water resources in the future. Depleting water resources could mean huge sales for two companies in particular. Is California The Future For Everyone? California’s historic drought has led to the state’s first ever mandatory water conservation law. One of the state’s 10 largest reservoirs, the New Melones, may be dry by this fall and nine reservoirs are… Read More

Even great companies can see their stock prices sink on short-term factors and negative headlines. If you want to outperform the market, then you have to be ready to avoid these near-term catalysts, take profits and wait to take advantage of lower prices down the road. I warned investors in late 2013 that one such company could be hit by the outcry for higher wages despite a strong business model and an excellent brand. Within a month of the article, shares were 20% lower. Since then, however, the share price has jumped 45% in about 18 months. Now that very… Read More

Even great companies can see their stock prices sink on short-term factors and negative headlines. If you want to outperform the market, then you have to be ready to avoid these near-term catalysts, take profits and wait to take advantage of lower prices down the road. I warned investors in late 2013 that one such company could be hit by the outcry for higher wages despite a strong business model and an excellent brand. Within a month of the article, shares were 20% lower. Since then, however, the share price has jumped 45% in about 18 months. Now that very same stock could be facing near-term catalysts to the downside. Another plunge in the shares could offer another great buying opportunity or it could wipe out all of your returns if you don’t take profits beforehand. This Company Is Juiced For Profits Jamba, Inc. (Nasdaq: JMBA), based in California, is the top retailer of the growing freshly-squeezed juice and smoothie market, with 100 million annual visitors to its 862 Jamba Juice stores. The company rolled out four grocery products to 300 stores in California through the last quarter of 2014 and plans on a national… Read More

When seeking market-beating stocks, few investors would probably consider a category as pedestrian as heating, ventilation, air conditioning (HVAC). And that would be a missed opportunity. Some HVAC stocks have been beating the market handily and not just lately but for years. One especially stellar performer: Lennox International Inc. (NYSE: LII), an industry leader with annual sales of $3.4 billion. Lennox’s stock is up 190% in the past three years, handily outpacing the S&P 500. Stocks typically only crush the market like this when the underlying company enjoys major long-term competitive advantages. And Lennox surely does. At the… Read More

When seeking market-beating stocks, few investors would probably consider a category as pedestrian as heating, ventilation, air conditioning (HVAC). And that would be a missed opportunity. Some HVAC stocks have been beating the market handily and not just lately but for years. One especially stellar performer: Lennox International Inc. (NYSE: LII), an industry leader with annual sales of $3.4 billion. Lennox’s stock is up 190% in the past three years, handily outpacing the S&P 500. Stocks typically only crush the market like this when the underlying company enjoys major long-term competitive advantages. And Lennox surely does. At the macro level, it’s one of the five core players in the HVAC market, and the market outlook is bright due to continued strength in real estate. Lennox focuses much more on residential than commercial real estate. So data like rising housing starts, increased filings for single-family home construction permits and spiking homebuilder confidence all bode especially well for the firm’s future. Another key macro indicator favoring Lennox is the Contractor Comfort Index, a measure of near-term growth expectations among HVAC contractors. April’s Index reading of 82 reflects very strong expectations (anything greater than 50 indicates a positive growth outlook). The… Read More

SodaStream International Ltd. (Nasdaq: SODA) is a classic case of a widely anticipated initial public offering that didn’t pan out.  Since bursting onto the scene in a late-2010 IPO, the carbonated soda machine maker received considerable investor buzz before eventually succumbing to unrealistic growth expectations.  On many occasions, the firm’s stock rallied on turnaround hopes or buyout rumors. Yet as the chart below shows, SodaStream never evolved into a profitable long-term investment. But more than just an unfortunate tale, SodaStream provides a crucial lesson on how to avoid repeating history by being alert for other stocks… Read More

SodaStream International Ltd. (Nasdaq: SODA) is a classic case of a widely anticipated initial public offering that didn’t pan out.  Since bursting onto the scene in a late-2010 IPO, the carbonated soda machine maker received considerable investor buzz before eventually succumbing to unrealistic growth expectations.  On many occasions, the firm’s stock rallied on turnaround hopes or buyout rumors. Yet as the chart below shows, SodaStream never evolved into a profitable long-term investment. But more than just an unfortunate tale, SodaStream provides a crucial lesson on how to avoid repeating history by being alert for other stocks headed down a similar path — such as The Container Store Group, Inc. (NYSE: TCS). Like SodaStream, the Container Store is a once-hot IPO that has become a perilous value trap. After much pre-IPO hype, The Container Store saw its shares double in its trading debut in 2013. The stock tacked on further gains in ensuing months, but has since fallen more than 60% from the January 2014 high.  As a business, The Container Store bears no resemblance to SodaStream, offering a range of household storage containers and organization systems. But it has the same problem. Read More

More than a year after it was first proposed, the $45 billion  merger between Comcast Corp. (Nasdaq: CMCSA) and Time Warner Cable, Inc. (NYSE: TWC) was canceled last month. The deal would have been the answer to an aging cable communications industry, creating a giant with sufficient scale to withstand the slow decline of cable and satellite subscriptions. It turns out, the giant may have been too large for regulators to allow, and Comcast pulled its bid before Washington could kill it. #-ad_banner-#But it won’t stop the wave of industry consolidation. That’s because of rising competition from firms like Netflix,… Read More

More than a year after it was first proposed, the $45 billion  merger between Comcast Corp. (Nasdaq: CMCSA) and Time Warner Cable, Inc. (NYSE: TWC) was canceled last month. The deal would have been the answer to an aging cable communications industry, creating a giant with sufficient scale to withstand the slow decline of cable and satellite subscriptions. It turns out, the giant may have been too large for regulators to allow, and Comcast pulled its bid before Washington could kill it. #-ad_banner-#But it won’t stop the wave of industry consolidation. That’s because of rising competition from firms like Netflix, Inc. (Nasdaq: NFLX) and others, which has led to a 13% drop in live television viewership over the past year, according to Nomura Research.   Broadband Is The Future Of The Industry Regulators made it no secret that control over the broadband market was a big factor in their expected disapproval of the proposed Comcast-TWC deal. Comcast served 21 million internet customers and TWC had 11.4 million customers at the end of the first quarter. The combined entity  would have controlled 55% of the domestic broadband market, along with 30% of the cable TV market. (Though analysts had been comparing… Read More

For an investor looking to bolster their portfolio, there’s no better time than the start of a new mega-trend. Imagine if you could go back and invest in computers or smartphones before their demand skyrocketed to unprecedented levels. #-ad_banner-#That’s the kind of opportunity we’re are sitting on today, but many investors haven’t even realized it yet. See, I’ve uncovered a burgeoning new industry that has returned more than double the S&P 500 in the past few years. And the numbers say this trend is only just getting started. Read More

For an investor looking to bolster their portfolio, there’s no better time than the start of a new mega-trend. Imagine if you could go back and invest in computers or smartphones before their demand skyrocketed to unprecedented levels. #-ad_banner-#That’s the kind of opportunity we’re are sitting on today, but many investors haven’t even realized it yet. See, I’ve uncovered a burgeoning new industry that has returned more than double the S&P 500 in the past few years. And the numbers say this trend is only just getting started. Let me explain. Since the end of 2010, the S&P 500 has earned investors an 81% return. On the other hand, companies in the cybersecurity industry have helped investors earn a whopping 163% — more than double the S&P’s return. Some might look at that chart and worry that they’ve missed the boat; that all of the biggest gains have already been made. But that just isn’t the case. Markets and Markets — a market research firm based… Read More

When Applied Materials, Inc. (Nasdaq: AMAT), the world’s largest semiconductor equipment manufacturer announced plans in 2011 to acquire Varian Semi for more than $4 billion, many industry participants cried foul. After all, AMAT, as the company is known, was already so dominant in the industry that it seemed unfair for it to grow yet larger. So when AMAT announced in 2014 that it planned to absorb rival Tokyo Electron, for more than $9 billion, competitors pleaded with regulators to nix the deal. Six months later, those regulators indeed expressed serious anti-trust concerns, and AMAT’s management has quietly canceled its proposed… Read More

When Applied Materials, Inc. (Nasdaq: AMAT), the world’s largest semiconductor equipment manufacturer announced plans in 2011 to acquire Varian Semi for more than $4 billion, many industry participants cried foul. After all, AMAT, as the company is known, was already so dominant in the industry that it seemed unfair for it to grow yet larger. So when AMAT announced in 2014 that it planned to absorb rival Tokyo Electron, for more than $9 billion, competitors pleaded with regulators to nix the deal. Six months later, those regulators indeed expressed serious anti-trust concerns, and AMAT’s management has quietly canceled its proposed merger. Simply put, with roughly $10 billion in annual revenues, this company is now too large to make any more deals. And that’s a good thing. Management has a new plan, which could fuel 40% upside for this slumping stock. In a moment, I’ll explain the perfect entry point for this stock. One hint: it’s coming very soon. Go-It-Alone Makes Sense While management likely wishes the Tokyo Electron deal could have been consummated, not all investors think it made complete sense. Tokyo Electron has seen recent market share losses, and AMAT’s core growth rate would likely have dimmed once… Read More

Healthcare has been the market’s best-performing sector during the past five years, with many stocks rising 200% or more. However, investors shouldn’t assume that the sector has been fully exploited. While many healthcare stocks have probably topped out for now, others still have room to run.  For outsized gain potential in the coming years, consider a relatively small, but innovative, medical device company called Natus Medical, Inc. (Nasdaq: BABY). Shares of Natus have been on fire, thanks to success in the firm’s two main markets, neurology and newborn care. Yet the promise of more growth, with the help of several… Read More

Healthcare has been the market’s best-performing sector during the past five years, with many stocks rising 200% or more. However, investors shouldn’t assume that the sector has been fully exploited. While many healthcare stocks have probably topped out for now, others still have room to run.  For outsized gain potential in the coming years, consider a relatively small, but innovative, medical device company called Natus Medical, Inc. (Nasdaq: BABY). Shares of Natus have been on fire, thanks to success in the firm’s two main markets, neurology and newborn care. Yet the promise of more growth, with the help of several encouraging new ventures, should propel Natus well beyond its current market value of $1.2 billion. Founded in 1989, Natus first made its mark in neurology by providing tests for the detection and  monitoring of epilepsy, Alzheimer’s disease and many other neurological disorders. The firm offers multiple varieties of (and adjuncts to) three such tests: electroencephalography (EEG), electromyography (EMG) and polysomnography (PSG). In a key competitive advantage, these devices typically run on proprietary software or algorithms, which confer unique features, such as a seizure detection program that enables faster, more accurate EEG interpretation. Accuracy is further boosted by a… Read More

In the most recent weekly survey conducted by the American Association of Individual Investors, investor sentiment is at a multi-year low, thanks to soft first-quarter economic and earnings data. Sentiment may worsen even further if predictions of a weaker-than-expected second quarter prove accurate. With the mood souring, a bullish outlook might seem out of touch, especially coming from an economically sensitive industry like truck manufacturing. But I certainly wouldn’t characterize management at commercial truck maker Paccar, Inc. (Nasdaq: PCAR) as out of touch. In fact, they are very bullish. And why not? The nation’s second-largest producer of heavy-duty trucks (mainly… Read More

In the most recent weekly survey conducted by the American Association of Individual Investors, investor sentiment is at a multi-year low, thanks to soft first-quarter economic and earnings data. Sentiment may worsen even further if predictions of a weaker-than-expected second quarter prove accurate. With the mood souring, a bullish outlook might seem out of touch, especially coming from an economically sensitive industry like truck manufacturing. But I certainly wouldn’t characterize management at commercial truck maker Paccar, Inc. (Nasdaq: PCAR) as out of touch. In fact, they are very bullish. And why not? The nation’s second-largest producer of heavy-duty trucks (mainly the class 8 “big rigs” it sells under the well-known Kenworth and Peterbilt brands) has seen a robust rebound in sales trends in recent years. Sales approached $19 billion in 2014,  more than double the recession low of $8 billion and an all-time company record. Paccar is off to strong start this year. During the Q1 conference call in April, management reported sales and earnings that handily beat estimates. They also raised their full-year estimate for industrywide class 8 truck sales in the United States and Canada to 260,000-to-290,000 units, versus an earlier projection for unit sales of 250,000-to-280,000. That… Read More

Millions of Americans remain absent from the workforce, and even those with jobs are wrestling with stagnant income growth. That helps explain why retailers have experienced a half decade of subpar sales growth. Yet that bleak recent history may soon be coming to an end. Wages, job openings and retail spending are inter-locking variables, and for a change, these factors are pointing to brighter days ahead. Of course it all starts with jobs. As we saw with the most recent employment report, the national unemployment rate stands firmly below 6%, a threshold that seemed almost inconceivable just a few years… Read More

Millions of Americans remain absent from the workforce, and even those with jobs are wrestling with stagnant income growth. That helps explain why retailers have experienced a half decade of subpar sales growth. Yet that bleak recent history may soon be coming to an end. Wages, job openings and retail spending are inter-locking variables, and for a change, these factors are pointing to brighter days ahead. Of course it all starts with jobs. As we saw with the most recent employment report, the national unemployment rate stands firmly below 6%, a threshold that seemed almost inconceivable just a few years ago.     Favorable Employment Trends Source: Bureau of Labor Statistics​ Despite the robust period of job creation, employees still lacked any leverage when it came time to seek wages. Yet that dynamic may be changing. Wages in the private sector grew 2.8% in the first quarter, the best showing since 2008. That may not seem like a big jump, but the trend is encouraging. Early signs of wage growth may be having an impact on consumers. According to the University of Michigan, consumer sentiment just rose to… Read More