While the Nasdaq Composite index recently rebounded to levels last seen in 2000, investors shouldn’t celebrate: as a group, technology stocks provided essentially zero return for 15 years. But that’s only true of investments that tracked the tech-laden Nasdaq. Results were far better in another very unique tech fund: the Fidelity Select IT Services Portfolio Fund (NYSE: FBSOX). #-ad_banner-#Those who put money in the mutual fund at the peak of the tech boom on March 10, 2000, have since seen their investments advance nearly 11% annually, compared to less than 1% a year for the Nasdaq. That makes FBSOX the… Read More

While the Nasdaq Composite index recently rebounded to levels last seen in 2000, investors shouldn’t celebrate: as a group, technology stocks provided essentially zero return for 15 years. But that’s only true of investments that tracked the tech-laden Nasdaq. Results were far better in another very unique tech fund: the Fidelity Select IT Services Portfolio Fund (NYSE: FBSOX). #-ad_banner-#Those who put money in the mutual fund at the peak of the tech boom on March 10, 2000, have since seen their investments advance nearly 11% annually, compared to less than 1% a year for the Nasdaq. That makes FBSOX the top tech fund since the bubble burst, according to Reuters. As the following chart shows, FBSOX chugged along as the Nasdaq soared into the stratosphere and then plunged back to earth. The fund was eventually caught in the downdraft, but managed to elude the worst of the meltdown. This fund is the classic tortoise versus the hare. It avoids buzzworthy tech stocks, many of which are prone to boom-and-bust cycles and instead focuses on another type of tech stock: the behind-the-scenes, unsung heroes of the IT revolution. For example, this fund’s third-largest holding, Cognizant Technology Solutions Corp. (Nasdaq:… Read More

Although diet crazes come and go, one trend has become clear:  Americans are drinking less soda. Per-capita soda consumption has been in decline since 1998, according to the industry publication Beverage Digest. That hasn’t stopped the big three beverage companies, The Coca-Cola Company (NYSE: KO), PepsiCo, Inc. (NYSE: PEP) and Dr. Pepper Snapple Group, Inc. (NYSE: DPS) from being fantastic investments. All have more than doubled over the past five years, in addition to sporting roughly 3% yields. Although the declining soda trend doesn’t look to be reversing anytime soon, PepsiCo, with its great international and product diversification, is poised… Read More

Although diet crazes come and go, one trend has become clear:  Americans are drinking less soda. Per-capita soda consumption has been in decline since 1998, according to the industry publication Beverage Digest. That hasn’t stopped the big three beverage companies, The Coca-Cola Company (NYSE: KO), PepsiCo, Inc. (NYSE: PEP) and Dr. Pepper Snapple Group, Inc. (NYSE: DPS) from being fantastic investments. All have more than doubled over the past five years, in addition to sporting roughly 3% yields. Although the declining soda trend doesn’t look to be reversing anytime soon, PepsiCo, with its great international and product diversification, is poised to be the outperformer. Why Not Dr. Pepper? Dr. Pepper has run away from Pepsi and Coca-Cola in the past six months, climbing 25% while shares of Coca-Cola and PepsiCo have fallen or remained flat. However, that’s almost certainly a function of the strengthening U.S. dollar. Dr. Pepper generates more than 90% of its revenue from North America and is nearly immune to the currency headwinds faced by PepsiCo and Coca-Cola. While Dr. Pepper has benefitted from that focus on North America in the past six months, its attractiveness to investors could wane if the dollar were to weaken. Read More

Although the market may seem expensive to many investors, solid bargains remain in many individual stocks.  You can find opportunity in both value stocks and riskier stocks. Risk-tolerant investors might consider Puma Biotechnology, Inc. (NYSE: PBYI), a development-stage pharmaceutical firm. Puma is on the cusp of receiving FDA approval for a promising new breast cancer treatment. Investors have already shown their growing interest in Puma, boosting shares 1,600% in the past five years. Yet, I’d argue that Puma has by much more room to run. The firm’s appeal stems in large part from its value as a buyout target. If… Read More

Although the market may seem expensive to many investors, solid bargains remain in many individual stocks.  You can find opportunity in both value stocks and riskier stocks. Risk-tolerant investors might consider Puma Biotechnology, Inc. (NYSE: PBYI), a development-stage pharmaceutical firm. Puma is on the cusp of receiving FDA approval for a promising new breast cancer treatment. Investors have already shown their growing interest in Puma, boosting shares 1,600% in the past five years. Yet, I’d argue that Puma has by much more room to run. The firm’s appeal stems in large part from its value as a buyout target. If you’re familiar with biotech, then you know mergers and acquisitions, or M&A, has been a major industry theme for many years. Larger drug makers have been snapping up smaller ones in their quest for growth and deeper product pipelines, pushing M&A activity back to levels not seen in more than half a decade. To illustrate that, take a look this chart I saw in Reuters recently. In Puma’s case, its flagship breast cancer drug, neratinib, could fetch a hefty premium from any number of the big pharmaceutical names. Indeed, analysts at RBC Capital Markets have called… Read More

Since the end of World War II, the United States has been unmatched in its role as a global superpower. No one can dispute the country’s influence shaping the world economically, politically and culturally.   However, in the last several decades, new powers have begun to emerge.  This inherent tension presents a wealth of opportunity for the companies that design and manufacture products for the cash-rich defense industry. Take, for example, the Asia-Pacific region. India, Singapore, South Korea, Vietnam, Mongolia, Laos and the Philippines are all on the rise. As nations grow, they aim for greater power and influence over… Read More

Since the end of World War II, the United States has been unmatched in its role as a global superpower. No one can dispute the country’s influence shaping the world economically, politically and culturally.   However, in the last several decades, new powers have begun to emerge.  This inherent tension presents a wealth of opportunity for the companies that design and manufacture products for the cash-rich defense industry. Take, for example, the Asia-Pacific region. India, Singapore, South Korea, Vietnam, Mongolia, Laos and the Philippines are all on the rise. As nations grow, they aim for greater power and influence over their neighbors. And while many of these nations are trade partners and allies with the U.S., all of these countries share a common concern: China. China — whose GDP has grown 90-fold since 1978 — overtook Japan as the world’s second largest economy in 2010. Despite slowing down in 2014, its economy is expected to grow by 7.4% in 2015, nearly tripling the expected growth of the United States. In 2013, U.S. military spending fell 7.8%, while China’s rose 7.4%. Between 2004 and 2013, China’s military spending grew 170% to $188.5 billion. Wary of China’s growing reach, the United States… Read More

As a regular subscriber to all of the leading car magazines, I am delighted to read about the technological advances taking place. Sure the gas mileage of many vehicles keeps rising, and the electrification of propulsion is a clear game-changer, but the most fascinating changes are taking place in every nook and cranny of today’s vehicles. The cars you’ll drive in just a few years will have a range of systems that couldn’t even be dreamt half a decade ago. Many of those changes involve communications and information technologies. How hot is this segment for investors? Well, shares of Harman… Read More

As a regular subscriber to all of the leading car magazines, I am delighted to read about the technological advances taking place. Sure the gas mileage of many vehicles keeps rising, and the electrification of propulsion is a clear game-changer, but the most fascinating changes are taking place in every nook and cranny of today’s vehicles. The cars you’ll drive in just a few years will have a range of systems that couldn’t even be dreamt half a decade ago. Many of those changes involve communications and information technologies. How hot is this segment for investors? Well, shares of Harman International Industries, Inc. (NYSE: HAR) have surged 40% since I profiled the company five months ago. Frankly, this stock may be getting ahead of itself, especially when you consider that the company’s cutting edge infotainment systems will still yield just 10-to-15% annual growth. I still love the investing angle, but am less enamored of this high-flying stock. Perhaps it’s time to broaden the scope with some other auto technology stocks. Here are three on my radar: Mobileye N.V. (NYSE: MBLY) This company, which focuses on vehicle piloting technologies, was one of the hottest initial public offerings of 2014. It… Read More

Public health insurance is a fast-growing business. The number of people enrolled in Medicaid and the Children’s Health Insurance Program has soared 19% to nearly 70 million since the Affordable Care Act (ACA) went into effect in 2013. This group of new enrollees, which represents more than 20% of the U.S. population, qualifies for public health insurance by meeting ACA requirements for annual household incomes that are less than 138% of federally-defined poverty levels (an annual salary of $11,770 for an individual and $24,250 for a family of four). Although highly controversial, the advent of government-sponsored health insurance has been… Read More

Public health insurance is a fast-growing business. The number of people enrolled in Medicaid and the Children’s Health Insurance Program has soared 19% to nearly 70 million since the Affordable Care Act (ACA) went into effect in 2013. This group of new enrollees, which represents more than 20% of the U.S. population, qualifies for public health insurance by meeting ACA requirements for annual household incomes that are less than 138% of federally-defined poverty levels (an annual salary of $11,770 for an individual and $24,250 for a family of four). Although highly controversial, the advent of government-sponsored health insurance has been a boon to firms involved in delivering health benefits. Analysts are especially high on managed care provider Molina Healthcare, Inc. (NYSE: MOH). Molina is not a well-known stock, but is clearly gaining a following these days. Following recent share price gains, investors may think they’ve missed the boat, but that’s not the case. Molina’s focus on providing healthcare to those receiving government assistance makes it a key beneficiary of public healthcare’s rapid expansion and a solid bet to outperform again this year.  Molina’s recent operating trends are quite impressive: the company now insures more than 2.6 million people,… Read More

  While many investors like to pursue hot stocks, others prefer investing in companies in the midst of an operational turnaround.   #-ad_banner-#In today’s market, I see potential for one high-profile stock that has been underperforming the market lately: auto industry icon Ford Motor Co. (NYSE: F).   Ford’s post-recession sales momentum has cooled a bit in recent months. For example, the company’s February sales in the United States fell roughly 2% year over year, well below analyst forecasts for nearly a 6% gain.   However, main rivals Toyota Motor Corp. (NYSE: TM), General Motors Co. (NYSE: GM) and Honda… Read More

  While many investors like to pursue hot stocks, others prefer investing in companies in the midst of an operational turnaround.   #-ad_banner-#In today’s market, I see potential for one high-profile stock that has been underperforming the market lately: auto industry icon Ford Motor Co. (NYSE: F).   Ford’s post-recession sales momentum has cooled a bit in recent months. For example, the company’s February sales in the United States fell roughly 2% year over year, well below analyst forecasts for nearly a 6% gain.   However, main rivals Toyota Motor Corp. (NYSE: TM), General Motors Co. (NYSE: GM) and Honda Motor Co. Ltd. (NYSE: HMC) all boosted U.S. sales in February, posting year-over-year gains of 13%, 4% and 5%, respectively. This news wasn’t the type that inspires confidence in Ford, especially following a tough 2014. Sales fell a modest 2% to $144 billion and per share profits fell by more than half to $0.80 a share for the year.   So what’s been holding Ford back?   For one thing, the automotive division stumbled in North America last year, posting declines in revenue and pretax profits of nearly 5% and 22%, respectively, in the region. The problem was Ford just… Read More

When a member of the blue-chip Dow Jones Industrial Average becomes a chronic underperformer, it often is at risk for removal from the index. Bank stocks after the financial crisis were prime examples. However, one laggard that should not worry about banishment right now is retail giant Wal-Mart (NYSE: WMT).  The world’s largest publicly traded employer has been lagging the domestic market since mid-2012 with a bout of strength seen in the fourth quarter of last year. Since notching its all-time highest close on Jan. 8 at $90.47, shares slid rather steadily to their March 11 closing low of $80.69. Read More

When a member of the blue-chip Dow Jones Industrial Average becomes a chronic underperformer, it often is at risk for removal from the index. Bank stocks after the financial crisis were prime examples. However, one laggard that should not worry about banishment right now is retail giant Wal-Mart (NYSE: WMT).  The world’s largest publicly traded employer has been lagging the domestic market since mid-2012 with a bout of strength seen in the fourth quarter of last year. Since notching its all-time highest close on Jan. 8 at $90.47, shares slid rather steadily to their March 11 closing low of $80.69. That was an 11% decline in eight weeks while the Dow was down just 1.5%.  With WMT sitting on top of a rather firm price floor, it may now be a great bargain. But it is more than just support on the chart that piques my interest.  The decline in shares this year seemed rather sedate — the steady erosion of a forgotten stock. And throughout the fall, on-balance volume did not budge, which is a bullish sign. #-ad_banner-# On-balance volume… Read More

The six year-old bull market is widely attributed to both stimulative policies from the Federal Reserve and a rebounding U.S. economy. Yet the Fed, the most powerful central bank in the world, may soon be taking the punch bowl away from the party.   #-ad_banner-#Does the Fed’s presumed move to begin lifting interest rates this summer mean it’s time to book profits and take a more defensive posture?  Then again, can you afford to do that when fixed-income investments earn just one or two percentage points above inflation? It’s a tough choice that many investors are pondering.  … Read More

The six year-old bull market is widely attributed to both stimulative policies from the Federal Reserve and a rebounding U.S. economy. Yet the Fed, the most powerful central bank in the world, may soon be taking the punch bowl away from the party.   #-ad_banner-#Does the Fed’s presumed move to begin lifting interest rates this summer mean it’s time to book profits and take a more defensive posture?  Then again, can you afford to do that when fixed-income investments earn just one or two percentage points above inflation? It’s a tough choice that many investors are pondering.   Bubble Or Rich Valuation  —  Bad For Investors Either Way One warning sign for risk-averse investors: The tech-heavy Nasdaq is now valued at 32 times trailing earnings, a premium of 68% to the stocks in the S&P 500.   Bond King Bill Gross recently joined the growing list questioning valuations saying that the index was in “a bit of a bubble,” and negative real interest rates have caused people to mindlessly pile into equities.   While the Nasdaq is nowhere near its 175 times earnings valuation it reached in 2000, a price-to-earnings of 32… Read More

  Investors often have difficulty letting go of outperforming growth stocks, even if there are clear signs it’s time to cash out. Case in point: the seemingly unstoppable rise in shares of The Kroger Co. (NYSE: KR), the nation’s largest supermarket chain by revenue.       With such bullish-looking technicals, Kroger may seem like an investment you can buy and hold, especially after the company’s recent quarterly report. In early March, Kroger announced that Q4 earnings grew 23% (from the year ago quarter), well ahead of consensus forecasts.   The quarterly report caps off an impressive… Read More

  Investors often have difficulty letting go of outperforming growth stocks, even if there are clear signs it’s time to cash out. Case in point: the seemingly unstoppable rise in shares of The Kroger Co. (NYSE: KR), the nation’s largest supermarket chain by revenue.       With such bullish-looking technicals, Kroger may seem like an investment you can buy and hold, especially after the company’s recent quarterly report. In early March, Kroger announced that Q4 earnings grew 23% (from the year ago quarter), well ahead of consensus forecasts.   The quarterly report caps off an impressive five-year surge, which saw revenues jump more than 40% to nearly $109 billion and net earnings soar more than 30-fold to $3.44 a share during the past five years.   #-ad_banner-#However, it would be unwise to assume Kroger will keep outperforming. With the company’s stock perched at record highs, now is a perfect time to determine if fundamentals can support current prices. And from where I’m sitting, this popular stock looks set to boil over.   Investor Overexuberance In the fiscal year ended February 1, earnings rose about 19%. Yet Kroger’s stock gained nearly 90% during the same period. This… Read More