Today’s essay is a little personal for me. The opportunity I’m about to tell you about stems from a condition I suffer from, along with millions of other Americans. But as I’ll explain in a moment, there are several companies quietly working on game-changing treatments that could not only offer relief — but also a windfall of profits to investors. If you don’t take care of yourself, they keep telling me, you can’t take care of anyone else. #-ad_banner-#And lately, I’ve been thinking about my own personal medical condition, diabetes mellitus, also commonly referred to as “Type I,” “insulin-dependent” or… Read More

Today’s essay is a little personal for me. The opportunity I’m about to tell you about stems from a condition I suffer from, along with millions of other Americans. But as I’ll explain in a moment, there are several companies quietly working on game-changing treatments that could not only offer relief — but also a windfall of profits to investors. If you don’t take care of yourself, they keep telling me, you can’t take care of anyone else. #-ad_banner-#And lately, I’ve been thinking about my own personal medical condition, diabetes mellitus, also commonly referred to as “Type I,” “insulin-dependent” or “juvenile-onset” diabetes. Diabetes is a metabolic disorder characterized by a malfunctioning pancreas. All food turns into sugar through digestion, but diabetics are unable to absorb the sugar the body needs to feed itself. Insulin, a hormone secreted by the pancreas’ beta cells, helps usher glucose through the cell’s semi-permeable membrane. Without insulin, sugar builds up in the bloodstream, causing a condition called hyperglycemia. Too much insulin (or not enough sugar) and the blood sugar goes too low, which is known as hypoglycemia. Type I diabetics must carefully monitor their carbohydrate intake and inject insulin to keep their blood sugar in… Read More

Newton’s First Law of Motion states, “An object at rest stays at rest, and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force.” This, of course, applies to physical objects, but there is a similar principle in the markets known as relative strength. Relative strength, or RS, is a way to rank a stock’s performance relative to all other stocks in the market. Specifically, it assigns a numerical score from 0 to 100 to a stock based on its performance over a certain period of time,… Read More

Newton’s First Law of Motion states, “An object at rest stays at rest, and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force.” This, of course, applies to physical objects, but there is a similar principle in the markets known as relative strength. Relative strength, or RS, is a way to rank a stock’s performance relative to all other stocks in the market. Specifically, it assigns a numerical score from 0 to 100 to a stock based on its performance over a certain period of time, typically six months. RS is one of the few indicators that have been proven to predict the future direction of a stock’s price. Research uncovered that stocks that are outperforming — thereby commanding a high RS rank — are more likely to continue outperforming than those that are underperforming. #-ad_banner-#In other words, a stock in upward motion is likely to stay in upward motion. It’s a simple concept — and a profitable one. One stock sporting a high RS rank that caught my eye is computer network services firm Level 3 Communications (NASDAQ: LVLT).  In August,… Read More

While hot new stock offerings such as Alibaba Group (NYSE: BABA) and news-rocked fads such as Ebola-proof hazmat suit maker Lakeland Industries (NASDAQ: LAKE) may get your juices flowing, who says making money has to be so exciting?  Indeed, I found an investor guide from 1960 saying just that. Clearly, investors over the decades keep forgetting that slow and steady really can pay off. Take women’s clothing retailer Cato Corporation (NYSE: CATO). Many of its peers sport high levels of volatility, yet most of these “exciting” stocks are either chopping around in ranges or in actual… Read More

While hot new stock offerings such as Alibaba Group (NYSE: BABA) and news-rocked fads such as Ebola-proof hazmat suit maker Lakeland Industries (NASDAQ: LAKE) may get your juices flowing, who says making money has to be so exciting?  Indeed, I found an investor guide from 1960 saying just that. Clearly, investors over the decades keep forgetting that slow and steady really can pay off. Take women’s clothing retailer Cato Corporation (NYSE: CATO). Many of its peers sport high levels of volatility, yet most of these “exciting” stocks are either chopping around in ranges or in actual bear markets.  For example, in the first half of this year, Urban Outfitters (NASDAQ: URBN) soared and then abruptly gave up all of its gains and then some. That is not the kind of excitement that I want in my portfolio. But CATO has been above the fray. Since mid-April, it is up over 45%, but it was absent in financial media until making a breakout move Wednesday. The stock peaked in early September near $36, and then settled into a sideways range until this week’s breakout. We can argue whether the pattern traced out was… Read More

All major U.S. stock indices finished in positive territory for the fourth consecutive week, led by the tech-heavy Nasdaq 100, which gained 1.6% and is now up 17.6% for the year. This index has been a major focus of mine since the Aug. 25 Market Outlook. Its move above major overhead resistance at 4,147 this month was an important catalyst for the recent strength in the broader market. #-ad_banner-#​On a sector basis, technology, consumer discretionary and materials led. Utilities, energy and financials trailed the pack and finished the week in negative territory. Read More

All major U.S. stock indices finished in positive territory for the fourth consecutive week, led by the tech-heavy Nasdaq 100, which gained 1.6% and is now up 17.6% for the year. This index has been a major focus of mine since the Aug. 25 Market Outlook. Its move above major overhead resistance at 4,147 this month was an important catalyst for the recent strength in the broader market. #-ad_banner-#​On a sector basis, technology, consumer discretionary and materials led. Utilities, energy and financials trailed the pack and finished the week in negative territory. Cisco Systems Resuming 2011 Uptrend? The recent strength and leadership shown by the technology sector resulted in a potential buying opportunity in Cisco Systems (NASDAQ: CSCO). I discussed the topic Wednesday on CNBC, just before the tech bellwether announced its fiscal first-quarter earnings. CSCO, which is the 10th largest constituent stock comprising 3.3% of the technology sector index, broke out to the upside on Friday from 15 months of sideways action that indicated investor indecision. This breakout indicates that CSCO’s larger August 2011 advance has resumed and targets a move to $32, 22% above… Read More

Let’s face it, there are good buyback programs and bad buyback programs. The bad ones generally fall into the category of “we just want to offset the generous stock options packages for our executives,” or “we have no other uses for our cash, even though our shares are very richly valued.” On the flip side, my favorite kind of buyback program has one simple factor: shares trade below tangible book value. #-ad_banner-#Buying back shares when they trade at a discount to book value is a no brainer. That’s because the share count can be cut by an even greater percentage… Read More

Let’s face it, there are good buyback programs and bad buyback programs. The bad ones generally fall into the category of “we just want to offset the generous stock options packages for our executives,” or “we have no other uses for our cash, even though our shares are very richly valued.” On the flip side, my favorite kind of buyback program has one simple factor: shares trade below tangible book value. #-ad_banner-#Buying back shares when they trade at a discount to book value is a no brainer. That’s because the share count can be cut by an even greater percentage than shareholder’s equity, which means that the price-to-book value will actually move lower. One of my favorite insurance stocks is putting this strategy into action. Municipal bond insurer Assured Guaranty Ltd (NYSE: AGO) is using its massive cash hoard to buy its own shares on the cheap and will likely keep doing so until shares have risen 35% from current levels. I wrote about this company nearly a year ago when management had just moved its headquarters to the United Kingdom — solely to speed the way to a faster pace of buybacks. Read More

We all like to see rising dividend yields. And that only happens for one of two reasons: either the quarterly payout increases or the share price decreases. The first cause is typically met with shareholder applause. The second… not so much. #-ad_banner-#Yet, temporary dips in share price can be far more effective in sending yields quickly skyward — turning a normal 2% payer into a 3% payer, juicing a 3% yield to 4%, and bumping a 5% payout to 6%, 7% or even more. And they can do so in a matter of days or weeks — expediting a process… Read More

We all like to see rising dividend yields. And that only happens for one of two reasons: either the quarterly payout increases or the share price decreases. The first cause is typically met with shareholder applause. The second… not so much. #-ad_banner-#Yet, temporary dips in share price can be far more effective in sending yields quickly skyward — turning a normal 2% payer into a 3% payer, juicing a 3% yield to 4%, and bumping a 5% payout to 6%, 7% or even more. And they can do so in a matter of days or weeks — expediting a process that can take years through the “preferred” route of dividend hikes. Take SeaDrill Ltd (Nasdaq: SDRL), a former member of my High-Yield Investing portfolio that I sold back in January for a 47% profit. Since then, the stock has plunged from $40 to $22.51 at the time this article was written. Back then, the annualized dividend of $3.92 per share was throwing off a yield of 9.8%. Nothing wrong with that. But today, thanks to market panic (and a minor two-cent hike in the quarterly payment), the yield has been driven into the stratosphere at 17.5%. How long would it… Read More

Unless you’re not much into tech, you’ve probably heard of GoPro, Inc. (Nasdaq: GRPR), a young firm gaining fame for its wearable high-definition cameras designed for extreme action video photography. The stock has taken investors on a rough ride recently, falling more than 20% below its early October peak of about $94. Still, the price is up nearly 140% since GoPro’s June 26 initial public offering. While analysts project fast growth for GoPro in the next few years and the stock could still have lots more upside, it’s not the only choice for investors seeking profits… Read More

Unless you’re not much into tech, you’ve probably heard of GoPro, Inc. (Nasdaq: GRPR), a young firm gaining fame for its wearable high-definition cameras designed for extreme action video photography. The stock has taken investors on a rough ride recently, falling more than 20% below its early October peak of about $94. Still, the price is up nearly 140% since GoPro’s June 26 initial public offering. While analysts project fast growth for GoPro in the next few years and the stock could still have lots more upside, it’s not the only choice for investors seeking profits from the growing popularity of wearable video cameras. In fact, I’ve got my eye on another such company, a recent startup based in Florida that has some unique offerings of its own. #-ad_banner-#Now, I don’t see this simply as a GoPro knockoff. GoPro is geared mainly toward the action enthusiast, and its small video cameras can be mounted in several ways — like to a helmet, a pair of goggles or a remote-controlled aircraft — to get shots that would be impossible or unsafe to attempt otherwise. This other firm’s cameras are even smaller, maybe roughly half the size of… Read More

Implementing all of the facets of the Affordable Care Act, commonly referred to as Obamacare, has come with an unfortunate side effect: So much time and money has been spent on adapting processes like ICD-10 (a mandated set of codes that enables healthcare data to be more freely exchanged among providers) that there has been little time or money to address other needs. #-ad_banner-#The good news: The heavy lifting to meet the mandates is now mostly done, and the healthcare industry is again focusing its IT resources on a burgeoning new trend: Digital technology. As analysts at Leerink Partners note,… Read More

Implementing all of the facets of the Affordable Care Act, commonly referred to as Obamacare, has come with an unfortunate side effect: So much time and money has been spent on adapting processes like ICD-10 (a mandated set of codes that enables healthcare data to be more freely exchanged among providers) that there has been little time or money to address other needs. #-ad_banner-#The good news: The heavy lifting to meet the mandates is now mostly done, and the healthcare industry is again focusing its IT resources on a burgeoning new trend: Digital technology. As analysts at Leerink Partners note, “the same digital revolution that re-ordered the media sector has now arrived at the healthcare sector, creating winners and losers.” Frankly, the entire healthcare profession seems to be just exiting the dark ages. Let’s quote from the Leerink analysts again: “While U.S. businesses were pioneering world-class productivity, collaboration and automation systems in offices and factories, healthcare’s payers and providers seemed stuck in a darkly-humorous parallel universe of old and kludgey technology, including telephone answering services, color-coded manila folders, large film negatives, paper clips, monochrome computer screens, multiple computer key-function codes from 1980s DOS manuals, handwritten phone messages on pink sheets… Read More

With thousands of publicly traded companies out there, it can be overwhelming trying to figure out which stocks to buy. Now add in a constantly changing market. #-ad_banner-#From tensions in Eastern Europe, Ebola scares, various quantitative easing policies — not to mention quarterly earnings — many factors influence the market on any given day. Between understanding what makes a good stock to buy and when is a good time to buy it, many investors end up frustrated or confused as to what they should do. One way to alleviate this stress — follow some simple rules. It’s worked very well… Read More

With thousands of publicly traded companies out there, it can be overwhelming trying to figure out which stocks to buy. Now add in a constantly changing market. #-ad_banner-#From tensions in Eastern Europe, Ebola scares, various quantitative easing policies — not to mention quarterly earnings — many factors influence the market on any given day. Between understanding what makes a good stock to buy and when is a good time to buy it, many investors end up frustrated or confused as to what they should do. One way to alleviate this stress — follow some simple rules. It’s worked very well for me and readers of my premium newsletter, Alpha Trader. Our system focuses on stocks outperforming the market today, which tend to continue beating the market in the months that follow. That’s been proven in academic journals, and it’s something I’ve talked about several times (here, and here). But that’s only half the story. Below are a handful of closed trades that significantly outpaced the market while we held them. While these stocks performed well, it’s not why I bring them up…   Stock Total Return S&P 500 Return Difference Hi-Crush Partners LP (NYSE: HCLP) 66.1% 22.0% +44.1%… Read More

We are just two weeks away from the day when Americans gather with their families to consume over 45 million turkeys. Butterball, the largest producer of turkey products in the United States, is a subsidiary of privately owned Seaboard Corporation, but another type of poultry has piqued my trading interest. Turkeys are always a hit during the holidays, but the real story here is growing global meat consumption, specifically poultry.  According to the agricultural outlook from the Organisation for Economic Co-operation and Development and United Nations’ Food and Agriculture Organization, poultry will overtake pork as the most consumed meat in… Read More

We are just two weeks away from the day when Americans gather with their families to consume over 45 million turkeys. Butterball, the largest producer of turkey products in the United States, is a subsidiary of privately owned Seaboard Corporation, but another type of poultry has piqued my trading interest. Turkeys are always a hit during the holidays, but the real story here is growing global meat consumption, specifically poultry.  According to the agricultural outlook from the Organisation for Economic Co-operation and Development and United Nations’ Food and Agriculture Organization, poultry will overtake pork as the most consumed meat in the world by 2020. In the United States, chicken is already the No. 1 consumed meat, surpassing pork in 1996, and overtaking beef in recent years. Tyson Foods (NYSE: TSN) is one of the world’s largest meat processors and the second-largest food production company in the Fortune 500. It provides 21% of all chicken produced in the United States, which accounts for nearly one-third of its revenue. #-ad_banner-#Tyson provides birds, feed and technical advice to poultry producers, who provide labor, housing and utilities. While the growers are insulated from changes in commodity prices for chicken and feed ingredients,… Read More