Slumping oil prices are crushing profits across the energy sector. And it won’t be long before the sector’s weakest players are forced to take drastic action in an attempt to survive. (My colleague Joseph Hogue touched on this theme last month.) There are currently several hundred distressed energy companies, most of which are smaller, highly-leveraged shale drillers. Some of these firms have perhaps three-to-six months of solvency remaining. Thus, by summer, we should begin seeing a spike in asset sales, restructurings and other cash-raising maneuvers as cash balances dry up. #-ad_banner-#Mergers and acquisitions, or M&A, is especially popular in these… Read More

Slumping oil prices are crushing profits across the energy sector. And it won’t be long before the sector’s weakest players are forced to take drastic action in an attempt to survive. (My colleague Joseph Hogue touched on this theme last month.) There are currently several hundred distressed energy companies, most of which are smaller, highly-leveraged shale drillers. Some of these firms have perhaps three-to-six months of solvency remaining. Thus, by summer, we should begin seeing a spike in asset sales, restructurings and other cash-raising maneuvers as cash balances dry up. #-ad_banner-#Mergers and acquisitions, or M&A, is especially popular in these situations. Simply put, weaker firms are more likely to pull through if they combine forces with a competitor or are bought out by one of the stronger industry players. As struggling energy companies increasingly opt for M&A, they’ll need investment banking expertise to shepherd them through the process. A top energy industry advisor: Evercore Partners, Inc. (NYSE: EVR). While the name may not be as well-recognized as those of huge rivals like The Goldman Sachs Group, Inc. (NYSE: GS) and Morgan Stanley (NYSE: MS), Evercore has an impressive track record. The firm was among the bankers involved in the high-profile… Read More

I bet you made a few New Year’s resolutions at the start of 2015. In fact, I’ll do you one better — I bet your resolution was to either eat better or exercise more. I’m no psychic, but studies show those are the two most common New Year’s resolutions. Aside from health and fitness though, the Journal of Clinical Psychology notes that financial resolutions rank No. 3 on the list of the most popular promises people make to themselves each year. Sadly though, the journal also notes that only 8% of people are successful in achieving them. Most fail fairly… Read More

I bet you made a few New Year’s resolutions at the start of 2015. In fact, I’ll do you one better — I bet your resolution was to either eat better or exercise more. I’m no psychic, but studies show those are the two most common New Year’s resolutions. Aside from health and fitness though, the Journal of Clinical Psychology notes that financial resolutions rank No. 3 on the list of the most popular promises people make to themselves each year. Sadly though, the journal also notes that only 8% of people are successful in achieving them. Most fail fairly quickly. I bring this up to ask an important question — one that I’ve never asked my readers before… Are you investing enough? It’s an honest question. And you needn’t undergo some sort of financial crash diet to figure it out. All you really need is a basic household budget and a little time around the kitchen table with the people in your life who spend your money. Budgets, I’ve noticed, are like balance sheets in one regard: they scare people silly. See it’s not the list of expenses that makes people uncomfortable; it’s the “other” number that makes… Read More

In hindsight, the six-year bull market was an easy rally to predict. Valuations were very low in early 2009, and Federal Reserve policy has been remarkably accommodating. Yet the forward view may not be so rosy. Sales growth is getting harder to achieve for companies in the S&P 500. Analysts are expecting sales per share at S&P 500 companies in 2015 to decline by 1.4%, while earnings are expected to eke out 2.5% growth to $120.17 per share, according to FactSet Research. #-ad_banner-#Sales growth has not been stellar in recent years, but companies have been able to increase earnings through… Read More

In hindsight, the six-year bull market was an easy rally to predict. Valuations were very low in early 2009, and Federal Reserve policy has been remarkably accommodating. Yet the forward view may not be so rosy. Sales growth is getting harder to achieve for companies in the S&P 500. Analysts are expecting sales per share at S&P 500 companies in 2015 to decline by 1.4%, while earnings are expected to eke out 2.5% growth to $120.17 per share, according to FactSet Research. #-ad_banner-#Sales growth has not been stellar in recent years, but companies have been able to increase earnings through expense management and lower interest expense. Net margins on results over the last four quarters are at 10% for the companies in the S&P 500, well above the 8.6% average over the last ten years. It is going to be progressively more difficult to squeeze out higher earnings on cost management alone and higher interest rates could be another headwind on profit margins. This tough corporate environment is coming as the Federal Reserve inches closer to a less accommodative monetary policy. Global growth has yet to fulfill the promise of increased easing by developed nation’s central banks and U.S. firms… Read More

“The world is on the brink of a demographic milestone,” claims the World Health Organization (WHO). According to WHO, children have outnumbered adults since the beginning of recorded history. But this situation is poised to change. For the first time, seniors over age 65 will soon outnumber children under 5. Two factors primarily account for this shift: declining fertility rates and medical advances prolonging life spans. This demographic shift creates a big opportunity for select health care firms. #-ad_banner-#Against the backdrop of the increasing need for medical care due to longer life expectancies, a trend is emerging. U.S. hospitals appear… Read More

“The world is on the brink of a demographic milestone,” claims the World Health Organization (WHO). According to WHO, children have outnumbered adults since the beginning of recorded history. But this situation is poised to change. For the first time, seniors over age 65 will soon outnumber children under 5. Two factors primarily account for this shift: declining fertility rates and medical advances prolonging life spans. This demographic shift creates a big opportunity for select health care firms. #-ad_banner-#Against the backdrop of the increasing need for medical care due to longer life expectancies, a trend is emerging. U.S. hospitals appear to be losing patients to ambulatory and homecare services. Over the past five years, hospital inpatient stays have declined 4% while the home health care market has grown. And it looks like this trend will continue. According to a 2014 report by Transparency Market Research, the global home health care market is expected to explode to $303.6 billion in 2020, up from $176.1 billion in 2013, growing at a compound rate of more than 8% per year. One company that should be a direct beneficiary of the growth in home health care is Kentucky-based Almost Family (NASDAQ:… Read More

Legendary banker J.P. Morgan was once asked by a reporter how the stock market will do. “It will fluctuate,” was his terse reply. But J.P. Morgan might have changed his response if he were alive today. Over the last three years,  the market has slowly marched upward with very few swings along the way. A look at a popular gauge of market choppiness (the volatility index, commonly referred to as the fear gauge, or the “VIX”) shows extremely low volatility in the equity markets since 2012. In tandem with the drop in volatility has been a slump in… Read More

Legendary banker J.P. Morgan was once asked by a reporter how the stock market will do. “It will fluctuate,” was his terse reply. But J.P. Morgan might have changed his response if he were alive today. Over the last three years,  the market has slowly marched upward with very few swings along the way. A look at a popular gauge of market choppiness (the volatility index, commonly referred to as the fear gauge, or the “VIX”) shows extremely low volatility in the equity markets since 2012. In tandem with the drop in volatility has been a slump in trading volume, which has been steadily falling since the financial crisis. For discount brokerages like TD Ameritrade Holding Corp. (NYSE: AMTD) and E*TRADE Financial Corp. (Nasdaq: ETFC), low trading volume is bad for business. TD Ameritrade earns more than 40% of its revenue from trading commissions; for E*TRADE, commissions are 25% of revenue. Yet J.P. Morgan’s insight on markets still remains relevant. Financial crises (such as  oil shocks) happen from time to time. And when these phenomena appear, trading volume and market volatility will rebound off of current low levels. #-ad_banner-#In the first part of 2015, as investors… Read More

Previously seen as little more than as an annoyance to corporate boards, activist investors have stepped up the heat in recent years. Backed by hedge funds and the ultra-rich investors, they are making a strong push to force companies to unlock shareholder value. #-ad_banner-#So far, these activists have been most vocal about higher cash returns to shareholders. Carl Icahn launched his historic fight with Apple, Inc. (Nasdaq: AAPL) in October 2013, calling for a $150 billion buyback. Reluctant at first, Apple has since instituted a dividend and bought back $68 billion in shares. Beyond higher cash returns, activist investors have… Read More

Previously seen as little more than as an annoyance to corporate boards, activist investors have stepped up the heat in recent years. Backed by hedge funds and the ultra-rich investors, they are making a strong push to force companies to unlock shareholder value. #-ad_banner-#So far, these activists have been most vocal about higher cash returns to shareholders. Carl Icahn launched his historic fight with Apple, Inc. (Nasdaq: AAPL) in October 2013, calling for a $150 billion buyback. Reluctant at first, Apple has since instituted a dividend and bought back $68 billion in shares. Beyond higher cash returns, activist investors have also increased their calls for spinoffs, management changes or an outright sale of the company. But a recent ruling by the Internal Revenue Service may spark a new wave of activist demands. The IRS’ moves could have a strong impact on one industry in particular, has already drawn the interest of a major activist investor. Do You Really Want To Be A Real Estate Company? The IRS ruling in question regards document storage firm Iron Mountain, Inc. (NYSE: IRM). The company was given the greenlight to convert into a real estate investment trust (REIT). Shares soon… Read More

There has been an unprecedented rally going on in an often-ignored corner of the market. And its enormous move has important ramifications for U.S. equities.  Starting in June, the U.S. dollar index, a measure of the value of the dollar relative to a basket of international currencies heavily weighted to the euro, has rallied 25%. The current rally is even greater in both speed and magnitude than the one we saw during the 2008 financial crash. This is a historically significant move. The index just made a key upside break above three decades’ worth of resistance,… Read More

There has been an unprecedented rally going on in an often-ignored corner of the market. And its enormous move has important ramifications for U.S. equities.  Starting in June, the U.S. dollar index, a measure of the value of the dollar relative to a basket of international currencies heavily weighted to the euro, has rallied 25%. The current rally is even greater in both speed and magnitude than the one we saw during the 2008 financial crash. This is a historically significant move. The index just made a key upside break above three decades’ worth of resistance, shown on the monthly chart below. Before we get into what this means for your portfolio going forward, let’s start with a quick primer on currency.  Currency is always valued relative to other currencies. For example, we can value the U.S. dollar based on how many Japanese yen one dollar can purchase. The dollar is often valued against the euro or a basket of currencies, which is what the dollar index above measures. Currencies have two main factors that drive their trends. The primary factor is the interest rate differentials between two countries. The country with the higher… Read More

I don’t normally chime in on well-known stocks. As Chief Investment Strategist of Game-Changing Stocks, my goal is tell readers about “The Next Big Thing” — under-the-radar trends or companies with the potential to change the market’s outlook on an entire industry. #-ad_banner-#If I’m right, my readers and I enjoy triple-digit gains. And not to boast, but my record of uncovering profitable opportunities is second to none. Every once in a while though, I come across a well-known company that leaves me shaking my head — it’s just too good to pass up. A few months ago, I told my… Read More

I don’t normally chime in on well-known stocks. As Chief Investment Strategist of Game-Changing Stocks, my goal is tell readers about “The Next Big Thing” — under-the-radar trends or companies with the potential to change the market’s outlook on an entire industry. #-ad_banner-#If I’m right, my readers and I enjoy triple-digit gains. And not to boast, but my record of uncovering profitable opportunities is second to none. Every once in a while though, I come across a well-known company that leaves me shaking my head — it’s just too good to pass up. A few months ago, I told my Game-Changing Stocks readers about one of these opportunities. Today, I’d like to give you an update on it. Retailer J.C. Penney (NYSE: JCP), announced its fourth-quarter and full 2014 results on February 26. The good news — strong holiday sales — was already priced into the stock, but the bottom-line number disappointed investors. It was a bit of a heartbreak: Since January 1, shares inched their way from the gutter to close above $9 on February 26. That’s a gain of more than 40% in less than two months, compared with the S&P 500’s 2.5% advance in the same time… Read More

At the height of the recent financial crisis, consumers discovered that banks were in no mood to make any sort of loans. In response, they sought out a new kind of bank, known as a peer-to-peer lender. Banks now likely rue the day they turned those consumers away. Peer-to-peer lending represented just $26 million worth of loans in 2009. Today, it’s a $1.7 billion business and could be a $10 billion business within five years. Peer-to-peer lending is just one of the radical changes taking place in the banking landscape. For example, banks issued 90% of all mortgages in 2009. Read More

At the height of the recent financial crisis, consumers discovered that banks were in no mood to make any sort of loans. In response, they sought out a new kind of bank, known as a peer-to-peer lender. Banks now likely rue the day they turned those consumers away. Peer-to-peer lending represented just $26 million worth of loans in 2009. Today, it’s a $1.7 billion business and could be a $10 billion business within five years. Peer-to-peer lending is just one of the radical changes taking place in the banking landscape. For example, banks issued 90% of all mortgages in 2009. Today, that figure has dropped to 58%. And small businesses, which are at the backbone of the U.S. economy, are now going out of their way to get loan quotes from alternative finance providers. #-ad_banner-#Gone are the days when local banks cultivated deep relationships with local businesses and citizens. Many of those banks have been gobbled up in an industrywide consolidation, and borrowers are quickly discovering new alternatives. Frankly, it’s easy to see why both consumers and businesses are flocking toward the upstarts. Not only do the “non-banks” offer slightly better loan rates, but they are also much more likely… Read More

Understanding this one catalyst could dramatically change where and how you invest… Right now, it’s the foundation of the largest wealth transfer in history. More money will change hands over the coming years from this trend than the annual sales of Wal-Mart, Kroger, Costco, Target and Sears combined. It’s revolutionized entire industries, created new markets and saved entire corporations. Take the baby food industry for example. In the early 40s and 50s this very catalyst helped launch a relatively unknown company, called the Freemont Canning Company, into a global icon. The company — now better known as Gerber — went… Read More

Understanding this one catalyst could dramatically change where and how you invest… Right now, it’s the foundation of the largest wealth transfer in history. More money will change hands over the coming years from this trend than the annual sales of Wal-Mart, Kroger, Costco, Target and Sears combined. It’s revolutionized entire industries, created new markets and saved entire corporations. Take the baby food industry for example. In the early 40s and 50s this very catalyst helped launch a relatively unknown company, called the Freemont Canning Company, into a global icon. The company — now better known as Gerber — went from selling just 590,000 jars of baby food per year to nearly two million jars per day. By 1955, Gerber’s sales swelled to 1.8 billion jars of baby food per year. It sold more jars of baby food in one year than in the company’s first 18 years combined. It’s also what helped boost Buster Brown’s shoe sales. The company went from selling $6 million worth of merchandise in 1949 to more than $30 million in sales in less than nine years — a 400% increase. Nobody understood this trend better than a man named Lee… Read More