Over the past half decade, large biotechnology stocks have delivered robust gains across the board. These companies sell a range of very popular drugs and have been generating massive profits. At the other end of the spectrum, small biotechs, most of which are still in their developmental stage, have been a hit-or-miss proposition, with a lot more hits and misses. Yet one group of small biotechs has been on fire, and gains look set to continue. Investors are only now coming to realize that the young, recently-public companies working on gene therapy aren’t a flash in the pan, but a… Read More

Over the past half decade, large biotechnology stocks have delivered robust gains across the board. These companies sell a range of very popular drugs and have been generating massive profits. At the other end of the spectrum, small biotechs, most of which are still in their developmental stage, have been a hit-or-miss proposition, with a lot more hits and misses. Yet one group of small biotechs has been on fire, and gains look set to continue. Investors are only now coming to realize that the young, recently-public companies working on gene therapy aren’t a flash in the pan, but a vanguard in the fight against many maladies. Since I profiled these stocks a year ago, they have exploded higher. On average, they have risen 191% over the past 12 months. (For more background, please read the April 2014 article.)  The catalysts for these stocks are quite clear: either they have announced impressive clinical advances, or secured the endorsement (and financial backing) of the big drug makers. For example: In December 2014, bluebird bio, Inc. (Nasdaq: BLUE) announced that patients in early stage trial were given the company’s LentiGlobin355 drug, and their need for chronic blood transfusions simply ceased. Read More

Health care stocks rank among the biggest winners of the current bull market, and one subsector that has shown significant outperformance in the past six months is medical equipment makers. Since many of the stocks in this group have already made big runs, I am on the lookout for fresh chart pattern breakouts. Aesthetic and medical device maker Cynosure (NASDAQ: CYNO) fits that bill. The company makes devices to treat various skin and vascular conditions, including tattoo removal and cellulite treatments. On the charts, Cynosure has been trading in a very wide long-term trading range between $21… Read More

Health care stocks rank among the biggest winners of the current bull market, and one subsector that has shown significant outperformance in the past six months is medical equipment makers. Since many of the stocks in this group have already made big runs, I am on the lookout for fresh chart pattern breakouts. Aesthetic and medical device maker Cynosure (NASDAQ: CYNO) fits that bill. The company makes devices to treat various skin and vascular conditions, including tattoo removal and cellulite treatments. On the charts, Cynosure has been trading in a very wide long-term trading range between $21 and $31.50, in round numbers.  On the last short-term leg up within the pattern, shares stalled at the upper border, but unlike previous attempts, they only pulled back by a small margin. This behavior leans bullish as it shows the bears could not drive the stock back down as they had done before. #-ad_banner-#​Earlier this month, CYNO poked its head above the upper border of the range and spent a few more days rallying, but then once again pulled back. It found support at the old range top.  What was once considered to be expensive was… Read More

Although new consumer technologies can capture a great deal of buzz, they are often just the tip of the tech iceberg. Many of the sector’s most lucrative developments occur completely behind the scenes. For instance, many investors are unaware of the groundbreaking advances being made in machine vision systems. These relatively new, camera-based technologies essentially endow robots with the superhuman vision necessary for high-speed manufacturing, often with extremely small components. Coupled with the appropriate software, the technology enables robots to identify, assemble and inspect products far too fast for the human eye to follow. The development of machine vision systems… Read More

Although new consumer technologies can capture a great deal of buzz, they are often just the tip of the tech iceberg. Many of the sector’s most lucrative developments occur completely behind the scenes. For instance, many investors are unaware of the groundbreaking advances being made in machine vision systems. These relatively new, camera-based technologies essentially endow robots with the superhuman vision necessary for high-speed manufacturing, often with extremely small components. Coupled with the appropriate software, the technology enables robots to identify, assemble and inspect products far too fast for the human eye to follow. The development of machine vision systems began more than half a century ago, but has only taken off in the past decade or so. In 2005, it was a $1.3 billion industry. Since then, machine vision has ballooned into a $4.5 billion market and is projected to more than double to $9.5 billion by 2020. The best way to play the trend: Cognex Corp. (Nasdaq: CGNX). Shares of this technology leader have posted robust gains and still have plenty of room left to run. Founded in 1981, Cognex sells machine vision systems that facilitate the production of cars, mobile devices, drugs and packaged foods,… Read More

Talk about a lousy way to start the day. Each morning, even when he’s on vacation, the President of the United States sits with top intelligence officials to review the President’s Daily Brief, a comprehensive list of new intelligence on threats and international crises affecting the country. These bureaucrats literally have to sit around a conference table every day and ask, “What could go wrong?” Sure there are hurricanes, earthquakes or volcanic eruptions. But as they say in the insurance industry, these are known as “acts of God.” They don’t include violent crimes or acts of terrorism, which are studied… Read More

Talk about a lousy way to start the day. Each morning, even when he’s on vacation, the President of the United States sits with top intelligence officials to review the President’s Daily Brief, a comprehensive list of new intelligence on threats and international crises affecting the country. These bureaucrats literally have to sit around a conference table every day and ask, “What could go wrong?” Sure there are hurricanes, earthquakes or volcanic eruptions. But as they say in the insurance industry, these are known as “acts of God.” They don’t include violent crimes or acts of terrorism, which are studied by other agencies. But thousands of dedicated Americans are working all over the world to keep U.S. citizens safe from an entirely different threat altogether. And in order to address it, the government will need to rely on a burgeoning industry that investors like you can capitalize on today. Let me explain. The order of the President’s Daily Brief has changed from year to year — counterintelligence jumped two spots to No. 2 this year, while weapons of mass destruction dropped a spot to No. 3. But one risk in particular — the No. 1 threat facing America — has… Read More

“Google” and the phrase “internet search” have become virtually synonymous. Google, Inc.’s (Nasdaq: GOOG) overwhelmingly dominant market share of web searches has helped the company to become the largest media company in the world, ranked by advertising revenue (as of 2013). The company’s projected 2015 sales of $65.8 billion mean that it will account for nearly 40% of the global digital advertising spend this year. With spending on digital advertising growing at 13% a year, well over the 3% growth in the broader marketing category, Google stands to continue posting great financial results. Its… Read More

“Google” and the phrase “internet search” have become virtually synonymous. Google, Inc.’s (Nasdaq: GOOG) overwhelmingly dominant market share of web searches has helped the company to become the largest media company in the world, ranked by advertising revenue (as of 2013). The company’s projected 2015 sales of $65.8 billion mean that it will account for nearly 40% of the global digital advertising spend this year. With spending on digital advertising growing at 13% a year, well over the 3% growth in the broader marketing category, Google stands to continue posting great financial results. Its shares trade for 25 times trailing earnings, which is not out of line with other fast-growth technology companies: If that was the entire story, then shares would be appealing. But a new patent filed by an up-and-coming competitor may mean trouble ahead. The patent applicant has already dominated one area of our virtual lives and could soon be taking huge market share from Google’s biggest money-maker. A Social Media Giant’s Strategic Advertising Plans Facebook, Inc. (Nasdaq: FB) recently filed for a patent that may underpin a lethal combination in internet data and advertising. The patent covers the use… Read More

We’re now officially in the age of cybercrime. And the problem is reaching epidemic proportions. Consider these statistics: — An estimated one-in-three computers have been attacked by viruses, spyware or phishing programs. — Companies spend more than $46 billion on IT equipment, software, services and personnel to protect data, according to Allied Business Intelligence, a technology market research firm. — 20,000. That’s the number of malicious “apps” that exist on Android smartphone devices. That’s 20,000 different ways for a skilled hacker to break into your smartphone and steal your personal information. These are mind-blowing numbers, which depict the level of… Read More

We’re now officially in the age of cybercrime. And the problem is reaching epidemic proportions. Consider these statistics: — An estimated one-in-three computers have been attacked by viruses, spyware or phishing programs. — Companies spend more than $46 billion on IT equipment, software, services and personnel to protect data, according to Allied Business Intelligence, a technology market research firm. — 20,000. That’s the number of malicious “apps” that exist on Android smartphone devices. That’s 20,000 different ways for a skilled hacker to break into your smartphone and steal your personal information. These are mind-blowing numbers, which depict the level of danger we’re dealing with. But with any crisis, there is a great investing opportunity. #-ad_banner-#James Clapper, the director of National Intelligence, put cybercrimes at the top of his annual list of threats facing the United States. He ranked it above natural disasters, violent crimes, viral pandemics and nuclear weaponry. The scary part? Many of these cyberattacks aren’t just happening to one or two victims at a time. A lot of them are happening on a massive scale. Just think about the financial destruction cyberterrorists caused corporations — and their customers — in 2014 alone. In January, Target announced that hackers… Read More

The banking industry is still in recovery mode after an era of heavy fines and a greatly-increased level of regulatory scrutiny. But the industry is also grappling with major technological shifts that are upending the old ways of doing business. Smaller, more nimble firms are taking non-traditional approaches to banking, which is creating headaches and headwinds for big banks. The Vast, Costly Branch Network The idea of a physical bank location on every street corner is dying. 30% of the U.S. population hasn’t visited a bank branch in more than six months, according to a study by Bankrate.com. As… Read More

The banking industry is still in recovery mode after an era of heavy fines and a greatly-increased level of regulatory scrutiny. But the industry is also grappling with major technological shifts that are upending the old ways of doing business. Smaller, more nimble firms are taking non-traditional approaches to banking, which is creating headaches and headwinds for big banks. The Vast, Costly Branch Network The idea of a physical bank location on every street corner is dying. 30% of the U.S. population hasn’t visited a bank branch in more than six months, according to a study by Bankrate.com. As a result, established banks are slowly adjusting to the new paradigm. The PNC Financial Services Group, Inc. (NYSE: PNC), the seventh largest bank by assets, reduced its number of retail branches by 6% over the last two years. JPMorgan Chase & Co. (NYSE: JPM) is spending millions to revamp current branches to be more automated and need fewer employees. Still, large retail banks can’t move quick enough to shrink their branch networks, which will result in additional costs for years to come. On the other end of the spectrum, the banks that never bothered to build a branch network now… Read More

For more than a decade, the business of making memory chips was a lousy one. The industry had ample excess capacity and pricing power was non-existent. And then the management team at Micron Technology, Inc. (Nasdaq: MU) decided to change all that. They correctly understood that by acquiring rivals — and then closing down excess manufacturing capacity — they could drive up prices and profits. I looked at this issue in 2012 and shares of Micron eventually soared to $36 from around $6. #-ad_banner-#A healthy supply/demand environment similarly created robust gains for rival chip-maker SanDisk Corp. (Nasdaq: SNDK). Not only… Read More

For more than a decade, the business of making memory chips was a lousy one. The industry had ample excess capacity and pricing power was non-existent. And then the management team at Micron Technology, Inc. (Nasdaq: MU) decided to change all that. They correctly understood that by acquiring rivals — and then closing down excess manufacturing capacity — they could drive up prices and profits. I looked at this issue in 2012 and shares of Micron eventually soared to $36 from around $6. #-ad_banner-#A healthy supply/demand environment similarly created robust gains for rival chip-maker SanDisk Corp. (Nasdaq: SNDK). Not only have these firms benefited from more rational supply trends, they are also benefiting from a powerful growth driver: surging demand, as solid state memory (also known as “flash memory”) is used in a proliferating number of electronic devices. Even personal computer manufacturers are making the switch from disk drive storage to solid state storage in many high-end machines. Yet even the best industries experience temporary headwinds. A recent modest pullback in demand and pricing has led to sharp share price pullbacks for both Micron and SanDisk. In my mind, only one of these two firms is poised for a solid… Read More

Over the past five years, the United States economy has been on the mend. So why is there still a pervasive sense that we’re stuck in the mud? Perhaps it’s because our economy has expanded at a 2.2%-to-2.4% rate in each of the past three years. That seems downright anemic compared to economic growth rates seen in prior decades. Yet every spring, economists sing the same refrain: “This is the year we’ll finally reach 3% GDP growth, and the economic recovery will finally feel real.” This year began with a similar refrain. According to a Wall… Read More

Over the past five years, the United States economy has been on the mend. So why is there still a pervasive sense that we’re stuck in the mud? Perhaps it’s because our economy has expanded at a 2.2%-to-2.4% rate in each of the past three years. That seems downright anemic compared to economic growth rates seen in prior decades. Yet every spring, economists sing the same refrain: “This is the year we’ll finally reach 3% GDP growth, and the economic recovery will finally feel real.” This year began with a similar refrain. According to a Wall Street Journal survey conducted in January, economists looked into their crystal balls and once again predicted a 3% economic growth rate this year. (That article suggested that the economy grew 2.6% last year, but that figure has been subsequently ratcheted down to 2.4%.) “The plunge in energy prices provides big dividends to consumers and businesses,” said Bernard Baumohl, chief global economist of the Economic Outlook Group to the WSJ at the time. Here’s the problem: any sort of oil-related dividend is nowhere to be found. Consider this recent sampling of economic data points: — Revolving credit (which mostly reflects credit… Read More

April will be the 70th month of economic expansion for the United States. That seems like a long amount of time, but it’s not abnormal. The last three expansions in the United States lasted an average of 95 months, with the longest lasting 10 years. Using recent history as a guide, we can estimate how far away we are from the next recession (about two years based on the average expansion length). But we have no way of knowing if our current expansion will end before then or maybe set a new record. Not even economists know when we’ll transition… Read More

April will be the 70th month of economic expansion for the United States. That seems like a long amount of time, but it’s not abnormal. The last three expansions in the United States lasted an average of 95 months, with the longest lasting 10 years. Using recent history as a guide, we can estimate how far away we are from the next recession (about two years based on the average expansion length). But we have no way of knowing if our current expansion will end before then or maybe set a new record. Not even economists know when we’ll transition from one phase into the next. In fact, economists generally don’t know that we’re even in a recession until 6-12 months after it begins. Knowing that we’re most likely nearing a later stage of our expansion, my focus has turned to what comes next. More specifically, I want to know whether the companies I’m investing in are prepared for the end of this expansion. #-ad_banner-#While it’s not possible to know when the next recession will start, we can work around that by investing in companies that perform well during both feast and famine. If a company… Read More