One of the first rules about owning stocks is not to get emotional — period.   However, when a large number of humans get together to trade stocks, that rule is almost always immediately thrown out of the window. Stocks are traded based on momentum rather than the true, underlying fundamentals of the business. This affects stocks in many different sectors: fervor over the latest technology, energy or commodity companies based on supply and demand, or biotech stocks that rise and fall according to a medical breakthrough.  Gun manufacturers are especially emotion-driven. Rarely have I ever heard a pundit or… Read More

One of the first rules about owning stocks is not to get emotional — period.   However, when a large number of humans get together to trade stocks, that rule is almost always immediately thrown out of the window. Stocks are traded based on momentum rather than the true, underlying fundamentals of the business. This affects stocks in many different sectors: fervor over the latest technology, energy or commodity companies based on supply and demand, or biotech stocks that rise and fall according to a medical breakthrough.  Gun manufacturers are especially emotion-driven. Rarely have I ever heard a pundit or analyst tout a gun stock based on fundamentals — at least not with genuine conviction.  Over the past decade stocks of gun makers have rocketed up, mainly due to fear of stricter government regulation. But what if you owned a gun manufacturer stock because it was just a great business? Sturm, Ruger and Co., Inc. (NYSE: RGR), popularly known as Ruger, is a classic example of an extremely healthy baby that’s been thrown out with the bathwater.  With a market cap of just over $900 million, Ruger has made a solid name for itself making high quality products that create… Read More

The Bakken is one of the hottest oil and gas plays in the world. Great fortunes have already been made banking on the Bakken, which is located below parts of Montana, North Dakota and stretches into Canada.  #-ad_banner-#The most notable fortune is that of Harold Hamm, the Chairman and CEO of Continental Resources, Inc. (NYSE: CLR).  Over the last five years, shares of Continental Resources are up over 400%. With Harold Hamm owning 70% of Continental, he’s become the 40th richest person in the world with a net worth of $19 billion. For those that missed the move in Continental… Read More

The Bakken is one of the hottest oil and gas plays in the world. Great fortunes have already been made banking on the Bakken, which is located below parts of Montana, North Dakota and stretches into Canada.  #-ad_banner-#The most notable fortune is that of Harold Hamm, the Chairman and CEO of Continental Resources, Inc. (NYSE: CLR).  Over the last five years, shares of Continental Resources are up over 400%. With Harold Hamm owning 70% of Continental, he’s become the 40th richest person in the world with a net worth of $19 billion. For those that missed the move in Continental Resources, there is still opportunity. One of the best plays on the Bakken shale that many investors have never heard of is Triangle Petroleum Corp. (NYSE: TPLM).  Hamm sees the Bakken as a can’t miss opportunity. Years ago he predicted that the Bakken would produce 1 million barrels of oil per day. That goal will likely be hit this year. With an estimated 24 billion barrels of recoverable oil in the Bakken region, this shale play could still be the opportunity of a lifetime.  A unique situation in the Bakken Triangle Petroleum is composed of three different… Read More

It’s hard to watch when one of America’s great 20th century success stories falls on hard times.  #-ad_banner-#It’s even harder to watch when the company’s struggles are simply the result of a complete disregard for its history, its primary demographics, and its place among competitors in the business. But as I’ll show you in a moment, one simple strategic change could create fantastic returns for investors…  The change I’m talking about is a change in leadership. Sometimes, that’s all it takes.  As I’ll show you in today’s essay, this one simple change can lead to a refocus on the tried-and-true… Read More

It’s hard to watch when one of America’s great 20th century success stories falls on hard times.  #-ad_banner-#It’s even harder to watch when the company’s struggles are simply the result of a complete disregard for its history, its primary demographics, and its place among competitors in the business. But as I’ll show you in a moment, one simple strategic change could create fantastic returns for investors…  The change I’m talking about is a change in leadership. Sometimes, that’s all it takes.  As I’ll show you in today’s essay, this one simple change can lead to a refocus on the tried-and-true principles that led to a company’s success in the first place. And once things get back on track, it can often lead to big profits for companies and shareholders alike. I’ve got my eye on one left-for-dead American company that’s poised to do just that… And the changes it’s making today could lead shares to bounce back in a major way in 2015. But before I tell you about the company, let me show you just exactly what a simple leadership change has done for companies in the past… The turnaround I’m looking at today reminds me of a few… Read More

A longstanding investing maxim holds that “the U.S. consumer accounts for two-thirds of the U.S. economy.” It’s never clear how that math works out, but consumer spending is undeniably important. #-ad_banner-#Yet investors should never overlook the impact of corporate spending. Business investments in plants, equipment and many other long-term assets that fall under the label capital expenditures are a crucial component of economic activity. Ford Motor Co. (NYSE: F) and General Motors Co. (NYSE: GM), for example, spent a combined $16 billion on capital expenditures last year. In just the past few months, even as the consumer… Read More

A longstanding investing maxim holds that “the U.S. consumer accounts for two-thirds of the U.S. economy.” It’s never clear how that math works out, but consumer spending is undeniably important. #-ad_banner-#Yet investors should never overlook the impact of corporate spending. Business investments in plants, equipment and many other long-term assets that fall under the label capital expenditures are a crucial component of economic activity. Ford Motor Co. (NYSE: F) and General Motors Co. (NYSE: GM), for example, spent a combined $16 billion on capital expenditures last year. In just the past few months, even as the consumer portion of the U.S. economy has remained in a funk, corporate spending is starting to move higher. And once the process starts, a virtuous cycle kicks in whereby the providers of capital goods, as they see new orders come in, need to boost their own levels of spending on long-term assets to meet demand. That spending, in turn, then spreads to an ever broader base of smaller suppliers. Pivot from buybacks and dividends Over the past few years, we have noted how a wide range of companies have earmarked their cash flow for share buybacks and dividend hikes. Meanwhile, they… Read More

Since the real estate bubble burst in 2007, many people have fallen behind on their mortgage payments. As a result, banks and financial firms have seen profits decline as short sales and foreclosures pile up. Five years later, the country is still feeling the effects of the bubble burst. About 28% of all single-family homes with a mortgage in the United States are now underwater, with U.S. home prices down nearly 33% from where they were during the peak of the housing bubble, real estate intelligence firm Zillow… Read More

Since the real estate bubble burst in 2007, many people have fallen behind on their mortgage payments. As a result, banks and financial firms have seen profits decline as short sales and foreclosures pile up. Five years later, the country is still feeling the effects of the bubble burst. About 28% of all single-family homes with a mortgage in the United States are now underwater, with U.S. home prices down nearly 33% from where they were during the peak of the housing bubble, real estate intelligence firm Zillow Inc. (Nasdaq: Z) reports.#-ad_banner-# As a whole, the U.S. housing market lost nearly $6.3 trillion in value since the housing crisis first began. This lost value has hit homeowners and lenders equally hard. Historically, the percentage of residential mortgages in foreclosure in the United States hovered between 1 and 1.5%. Today, it is up about 4.5%. Foreclosure filings in the United States are projected to keep increasing for the next few years, according to RealtyTrac, an online database of foreclosures, auction and bank-owned homes. To make… Read More

Now that President Barack Obama has been reelected, many fear his vision of big-government planning, spending and taxing. But what is so bad about big government anyway? #-ad_banner-# The problem is, with a growing government comes growing expenses. And these days the United States is sitting on the edge of a much-talked-about “fiscal cliff” that could make a huge dent on its financial status. Simply put, the country can’t afford to keep spending like it has.    But not all is lost: This major disconnect could mean a tremendous opportunity for savvy… Read More

Now that President Barack Obama has been reelected, many fear his vision of big-government planning, spending and taxing. But what is so bad about big government anyway? #-ad_banner-# The problem is, with a growing government comes growing expenses. And these days the United States is sitting on the edge of a much-talked-about “fiscal cliff” that could make a huge dent on its financial status. Simply put, the country can’t afford to keep spending like it has.    But not all is lost: This major disconnect could mean a tremendous opportunity for savvy investors to make at least a 40% return.   You don’t have to go too far If you look closely at state and local government budgets, then you’ll see how their problems only get worse. Though state tax revenue is picking up, mandated spending obligations and reduced federal stimulus are placing a heavy burden on budgets.    Imagine the size of the hole in the pockets of these local governments during the past few years as they incurred less revenue from lower property values, and endured cutbacks in federal and state aid. In addition, some states have seen a mass… Read More

Third-quarter earnings season was an unmitigated disaster. With the economy stumbling along due to weakness in Europe and China, and margins reaching a multi-year cyclical high, more than a few companies disappointed the Street with weaker-than-expected earnings or guidance.   This list includes bellwethers like McDonald’s Corp. (NYSE: MCD), Caterpillar Inc. (NYSE: CAT) and even seemingly invincible technology juggernauts like Apple Inc. (Nasdaq: AAPL) and Google Inc. (Nasdaq: GOOG), all delivering results short of expectations that sent… Read More

Third-quarter earnings season was an unmitigated disaster. With the economy stumbling along due to weakness in Europe and China, and margins reaching a multi-year cyclical high, more than a few companies disappointed the Street with weaker-than-expected earnings or guidance.   This list includes bellwethers like McDonald’s Corp. (NYSE: MCD), Caterpillar Inc. (NYSE: CAT) and even seemingly invincible technology juggernauts like Apple Inc. (Nasdaq: AAPL) and Google Inc. (Nasdaq: GOOG), all delivering results short of expectations that sent shares and estimates tumbling lower.     These disappointing results mirrored a larger trend. Total S&P 500 earnings for the quarter were down 2.2% from last year, the first year-over-year decline in more than three years. Total revenue is also down 3.6%, with just 38% of companies reporting revenue surprises. Although analysts are still calling for 3.5% earnings growth in the fourth-quarter and 7% earnings growth in 2013, it’s clear the private sector is facing some serious challenges in the face of slow economic growth.#-ad_banner-#   But despite these obvious headwinds, there… Read More

After the financial and economic implosion of 2008, many companies were forced to implement drastic operational changes to stay competitive and profitable. That included increasing productivity, reducing labor resources and lowering capital spending to build cash and liquidity. These strategies had a big effect on earnings, and now the S&P 500 is on the cusp of returning to peak earnings last seen in 2007. #-ad_banner-#But while that big… Read More

After the financial and economic implosion of 2008, many companies were forced to implement drastic operational changes to stay competitive and profitable. That included increasing productivity, reducing labor resources and lowering capital spending to build cash and liquidity. These strategies had a big effect on earnings, and now the S&P 500 is on the cusp of returning to peak earnings last seen in 2007. #-ad_banner-#But while that big rebound in earnings has been great for stocks (the S&P 500 has more than doubled from its low in March 2009) it also has the private sector sitting at the top of a multi-year expansion in margins and record profitability. Take Coca-Cola Co. (NYSE: KO), for example. The company’s operating margin exploded higher out of the recession in 2009 all the way through 2011, climbing from a 10-year average of 21% to an all-time high above 33% in July of 2011.  What Coke… Read More

One way to put less money at risk to play Apple (Nasdaq: AAPL) is via its suppliers. When deciding which one, traders need to be selective and choose one with a decent positive correlation to Apple’s stock price.#-ad_banner-# iPhone chip supplier Skyworks Solutions (Nasdaq: SWKS) is one such stock and my pick for playing Apple with more leverage. The stock has a beta of 1.46 versus the S&P… Read More

One way to put less money at risk to play Apple (Nasdaq: AAPL) is via its suppliers. When deciding which one, traders need to be selective and choose one with a decent positive correlation to Apple’s stock price.#-ad_banner-# iPhone chip supplier Skyworks Solutions (Nasdaq: SWKS) is one such stock and my pick for playing Apple with more leverage. The stock has a beta of 1.46 versus the S&P 500, whereas Apple more or less is the market with a beta closer to 0.93. On the charts, the stock looks eerily similar to Apple and has reached or breached several key Fibonacci retracement levels that currently offer good risk/reward for a short-side trade for a 12% gain. A simple look at the correlation between Skyworks (yellow line) and Apple (blue line) pretty much sums up all we need to know. Read More

William O’Neil, known as one of the best stock pickers of all time, is credited with pioneering the use of computers for analysing stocks. O’Neil became famous as the publisher of the newspaper Investor’s Business Daily and author of the book “How to Make Money in Stocks: A Winning System in Good Times and Bad,” which identified seven factors all top-performing companies possess. Created after an exhaustive study of eight different market cycles during 40 years of data, O’Neil named his new… Read More

William O’Neil, known as one of the best stock pickers of all time, is credited with pioneering the use of computers for analysing stocks. O’Neil became famous as the publisher of the newspaper Investor’s Business Daily and author of the book “How to Make Money in Stocks: A Winning System in Good Times and Bad,” which identified seven factors all top-performing companies possess. Created after an exhaustive study of eight different market cycles during 40 years of data, O’Neil named his new investing tactic CANSLIM, an anagram for the seven traits stocks tend to have before their biggest gains.  CANSLIM has stood the test of time: the American Association of Individual Investors (AAII) has even ranked it as one of the best portfolio strategies, with a 10-year average return of 13.2% and a nice 28.7% year-to-date return.  This strategy is not a one-trick pony relying on a single niche stock-picking technique. CANSLIM combines technical and fundamental factors when choosing companies for investment. It basically covers all the bases for what creates a… Read More