When interpreting the tea leaves of the economy and the market, economists, money managers, analysts and most garden-variety market pundits consult the same set of widely used economic indicators.  #-ad_banner-#The S&P/Case-Shiller home price indices. Various purchasing managers’ indices. An array of employment reports.  All of these are good, tangible indicators about the health of the overall economy and the direction of the markets.  However, I’ve found a widely held stock that indicates the health of many different indicators — from commodity costs to wage inflation — and often foreshadows how the broader equity markets will behave.  I look… Read More

When interpreting the tea leaves of the economy and the market, economists, money managers, analysts and most garden-variety market pundits consult the same set of widely used economic indicators.  #-ad_banner-#The S&P/Case-Shiller home price indices. Various purchasing managers’ indices. An array of employment reports.  All of these are good, tangible indicators about the health of the overall economy and the direction of the markets.  However, I’ve found a widely held stock that indicates the health of many different indicators — from commodity costs to wage inflation — and often foreshadows how the broader equity markets will behave.  I look to the Golden Arches.  What the stock tells me is much more than how many burgers and fries Mickey D’s has sold. Including revenue from franchised outlets, McDonald’s (NYSE: MCD) boasts annual sales in excess of $30 billion, which would make the company the world’s 68th-largest economy (just ahead of Ecuador). Let’s look at the two most important components of McDonald’s business and enable it to serve 1% of the Earth’s population every single day: materials and labor. In terms of materials, McDonald’s uses 1 billion pounds of beef a year — in the U.S. alone. That’s equal to 5.5… Read More

Wall Street’s big banks, and particularly their analyst corps, are notoriously late to the party when it comes to upgrades.  #-ad_banner-#Yet being late doesn’t mean they’re wrong. In fact, their delayed arrival often gives the stock a bullish jolt. That’s precisely what happened this week when Goldman Sachs upgraded video-streaming company Netflix (Nasdaq: NFLX) from “neutral” to “buy.” Goldman also raised its price target significantly, to $590 from $380, an increase of more than 55%. In its note to clients, Goldman said that Netflix has the potential to more than double its global subscriber base over the next… Read More

Wall Street’s big banks, and particularly their analyst corps, are notoriously late to the party when it comes to upgrades.  #-ad_banner-#Yet being late doesn’t mean they’re wrong. In fact, their delayed arrival often gives the stock a bullish jolt. That’s precisely what happened this week when Goldman Sachs upgraded video-streaming company Netflix (Nasdaq: NFLX) from “neutral” to “buy.” Goldman also raised its price target significantly, to $590 from $380, an increase of more than 55%. In its note to clients, Goldman said that Netflix has the potential to more than double its global subscriber base over the next three years. The renewed optimism from Goldman comes as Netflix continues to expand its footprint internationally, which includes a big push into Europe. In late May, Netflix announced plans to launch its streaming video service in six European countries, including the two biggest European markets, France and Germany. So how late to the party were Goldman’s analysts? Well, shares were trading 16% above their previous $380 target before the upgrade hit the wire. NFLX has more than doubled in the past year, and over the past 24 months, it is up an incredible 583%. Of course, Goldman’s arrival livened up… Read More

With the second half of the year underway, it’s prudent to take stock on how your portfolio performed in the first six months of 2014.  #-ad_banner-#In the same vein, it’s also the perfect time to see where any value or growth opportunities may lie as we go into the end of 2014. One billionaire has decided to make the latter much easier for investors. Mario Gabelli, the renowned value manager and founder of the GAMCO family of funds, took to CNBC last month and shared some of his views on equity markets. With no shortage of commentary… Read More

With the second half of the year underway, it’s prudent to take stock on how your portfolio performed in the first six months of 2014.  #-ad_banner-#In the same vein, it’s also the perfect time to see where any value or growth opportunities may lie as we go into the end of 2014. One billionaire has decided to make the latter much easier for investors. Mario Gabelli, the renowned value manager and founder of the GAMCO family of funds, took to CNBC last month and shared some of his views on equity markets. With no shortage of commentary these days on financial news networks, why should you listen to Gabelli? For starters, Gabelli has been investing for nearly six decades now. He has come a long way since buying his first stock at the age of 13. Now at the age of 72, his firm, GAMCO Investors, currently manages some $48 billion in assets, with Gabelli amassing a personal fortune of $1.8 billion along the way. As such, his experience should cause some ears to perk up when he dishes free institutional research. Fortunately for us, Gabelli mentioned three of his top picks for the latter half of… Read More

Let’s be realistic. You’re NOT going to get rich in a hurry by investing in mainstream blue-chip stocks. The S&P 500 is a handy benchmark and a good proxy for the U.S. economy, but it’s not going to make anyone rich unless you have decades to invest. #-ad_banner-#If you want to truly soar above the market, you have to dedicate at least part of your portfolio to serious big-game hunting. With that in mind, my team and I just released a report on my boldest predictions for 2015. These are ideas that you won’t hear about in the mainstream financial… Read More

Let’s be realistic. You’re NOT going to get rich in a hurry by investing in mainstream blue-chip stocks. The S&P 500 is a handy benchmark and a good proxy for the U.S. economy, but it’s not going to make anyone rich unless you have decades to invest. #-ad_banner-#If you want to truly soar above the market, you have to dedicate at least part of your portfolio to serious big-game hunting. With that in mind, my team and I just released a report on my boldest predictions for 2015. These are ideas that you won’t hear about in the mainstream financial press until it’s too late. In the past, my previous predictions have made thousands of dollars for subscribers of my newsletter, Game-Changing Stocks. For example, in 2009 we told our readers to expect a big move in nanotechnology. We said, “This is an opportunity of enormous proportions.” Our nanotech pick shot up 293%. My prediction for 2010 we called the “best sci-fi speculation of the year.” The powerful technology called RFID would be the root cause of our three stock picks soaring 42%… 89%… and 310%, a year after being featured in my list. And last year I predicted there… Read More

When my father graduated from college, he and many of his graduating class entered the workforce with the expectation that their chosen career paths would last until retirement.  #-ad_banner-#These employers valued loyalty and devotion almost as much as effort and innovation. The “company men” of my father’s generation provided their employers these qualities in spades. This feeling of being an essential part of the company was largely the same for blue- and white-collar employees alike. Fast-forward a generation or two, and things have changed. Today, employees see themselves as free agents, free to work for whoever offers the… Read More

When my father graduated from college, he and many of his graduating class entered the workforce with the expectation that their chosen career paths would last until retirement.  #-ad_banner-#These employers valued loyalty and devotion almost as much as effort and innovation. The “company men” of my father’s generation provided their employers these qualities in spades. This feeling of being an essential part of the company was largely the same for blue- and white-collar employees alike. Fast-forward a generation or two, and things have changed. Today, employees see themselves as free agents, free to work for whoever offers the best deal. This increase in employee mobility has accelerated an employment trend nearly 70 years in the making. The temporary worker industry as we know it today began in 1947 after World War II. Temp agencies were started to provide a low-cost labor force that wasn’t part of the powerful unions of the time. These temporary employees provided the same services as full-time workers for a fraction of the full-time pay — and without costing the employer benefits, vacation time or even Social Security taxes. During the 1970s, a period of deep recession in the United States, the temporary worker… Read More

General Motors (NYSE: GM) continues to reel from its seemingly constant string of recalls. On Monday, the company announced its latest — six new recalls affecting about 7.6 million vehicles.  #-ad_banner-#Yet, the stock has reached an interesting inflection point on the charts, which now offers traders a good long-side setup. In recent months, the news has focused on the company’s failure to detect a faulty ignition switch, which resulted in deaths and the company’s recalls of millions of vehicles.  From an investing standpoint, however, traders need to separate reality from perception. Getting hung up on… Read More

General Motors (NYSE: GM) continues to reel from its seemingly constant string of recalls. On Monday, the company announced its latest — six new recalls affecting about 7.6 million vehicles.  #-ad_banner-#Yet, the stock has reached an interesting inflection point on the charts, which now offers traders a good long-side setup. In recent months, the news has focused on the company’s failure to detect a faulty ignition switch, which resulted in deaths and the company’s recalls of millions of vehicles.  From an investing standpoint, however, traders need to separate reality from perception. Getting hung up on the headlines could cause you to miss out on profits.  Successful trading depends on one’s ability to put emotions aside and stick to a predetermined trading plan. Along the same lines, traders must be able to tune out the noise and focus on the news and price action that matters.   In the case of GM, some worry these massive recalls could bring about the second downfall of the company, but it is important to understand GM’s recent history and its relationship with the U.S. government.  When GM crumbled into bankruptcy under a mountain of debt during the financial crisis,… Read More

A quick look at institutional buying in June has shown that “sell in May and go away” may not apply to you…  #-ad_banner-#At least, not if your net worth is in the 10 figures. While many funds pull away from the markets during the summer lull (as my colleague David Sterman outlined in May), a subset of billionaires has continued to build new or existing positions in stocks surrounding the red-hot energy sector — and big ones, at that. Billionaire fund managers Leon Cooperman, Barry Rosenstein and Mario Gabelli have been putting their buying power to work in… Read More

A quick look at institutional buying in June has shown that “sell in May and go away” may not apply to you…  #-ad_banner-#At least, not if your net worth is in the 10 figures. While many funds pull away from the markets during the summer lull (as my colleague David Sterman outlined in May), a subset of billionaires has continued to build new or existing positions in stocks surrounding the red-hot energy sector — and big ones, at that. Billionaire fund managers Leon Cooperman, Barry Rosenstein and Mario Gabelli have been putting their buying power to work in the past few weeks, according to 13G and 13D filings submitted to the SEC in June. The regulator requires these documents to be submitted when an investment firm has acquired greater than 5% of a stock’s outstanding shares, which is considered significant ownership in the SEC’s eyes. These gurus have histories of successful stock-picking and have now focused their buying on companies with strong ties to the commodity sector. Let’s take a closer look at the stocks they’re targeting. Nordic American Offshore (NYSE: NAO )  Last week, Cooperman of Omega Advisors said he had acquired about 4.9 million shares… Read More

The long-awaited homebuilding recovery has yet to materialize, and new headwinds may be building. #-ad_banner-#This was supposed to be the year that homebuilders could finally celebrate. The rate of new-home construction has been well below average, thanks to still-low levels of new household formation. The Millennial generation has been shacking up with mom and dad — or renting — but many have expected a slowly improving U.S. economy to alter that dynamic. The fact that mortgage interest rates remain near generational lows has been seen as another positive catalyst. Yet the hoped for… Read More

The long-awaited homebuilding recovery has yet to materialize, and new headwinds may be building. #-ad_banner-#This was supposed to be the year that homebuilders could finally celebrate. The rate of new-home construction has been well below average, thanks to still-low levels of new household formation. The Millennial generation has been shacking up with mom and dad — or renting — but many have expected a slowly improving U.S. economy to alter that dynamic. The fact that mortgage interest rates remain near generational lows has been seen as another positive catalyst. Yet the hoped for rebound still isn’t here. The U.S. Commerce Department recently reported that construction levels were weaker than expected in May. If you’re bullish on the U.S. economy, then you know this sector needs to rumble back to life. Residential construction plays a huge role in the U.S. economy, supporting a wide range of ancillary industries, and a firmer pace of housing construction and sales would make a meaningful dent in our nation’s employment rate.  Housing needs to get busy. At some point, perhaps sooner rather than later, the benign interest rate environment may vanish, and rising mortgage rates… Read More

Every few years, a hot new hedge fund manager emerges on the scene. Today, that hedge fund manager looks to be Julian Robertson’s protege Chase Coleman. #-ad_banner-#One of Robertson’s “Tiger Cubs,” Coleman learned from his mentor to look for a “smart idea, grounded on exhaustive research, followed by a big bet.” My colleague David Sterman profiled Coleman in 2012 after his Tiger Global fund was the top-performing hedge fund for all of 2011, with a gain of 45%. In 2012, Coleman was buying shares of Facebook (Nasdaq: FB) when they were only $29. Read More

Every few years, a hot new hedge fund manager emerges on the scene. Today, that hedge fund manager looks to be Julian Robertson’s protege Chase Coleman. #-ad_banner-#One of Robertson’s “Tiger Cubs,” Coleman learned from his mentor to look for a “smart idea, grounded on exhaustive research, followed by a big bet.” My colleague David Sterman profiled Coleman in 2012 after his Tiger Global fund was the top-performing hedge fund for all of 2011, with a gain of 45%. In 2012, Coleman was buying shares of Facebook (Nasdaq: FB) when they were only $29. Now, Coleman manages about $14 billion at Tiger Global. Along the way, he has made himself a billionaire with a net worth of $1.6 billion, according to Forbes. Coleman is now turning his attention to retail, particularly shares of luxury home furnishings retailer Restoration Hardware (NYSE: RH). Tiger Global just increased its stake last month by 1.25 million shares and now owns 6.4% of the company. It’s easy to see why Coleman increased his stake in the company. The company is firing on all cylinders and outperforming the home furnishings industry and its competitors. In the first quarter, Restoration Hardware… Read More

Trading stocks is a fast business. One great earnings report, a big product announcement, or a high-profile analyst upgrade can send a stock soaring — and fast. The latter catalyst occurred this week for flash-sales e-tailer Zulily (NASDAQ: ZU). #-ad_banner-#Shares spiked 9% on Wednesday after Goldman Sachs (NYSE: GS) upgraded the stock to “buy” from “neutral.” The highly respected brokerage firm also raised its price target to $50 from $47, which is 24% higher than current prices. According to Goldman, the upgrade is based on what the brokerage firm calls the company’s “hyper growth” potential. So, what does Goldman consider… Read More

Trading stocks is a fast business. One great earnings report, a big product announcement, or a high-profile analyst upgrade can send a stock soaring — and fast. The latter catalyst occurred this week for flash-sales e-tailer Zulily (NASDAQ: ZU). #-ad_banner-#Shares spiked 9% on Wednesday after Goldman Sachs (NYSE: GS) upgraded the stock to “buy” from “neutral.” The highly respected brokerage firm also raised its price target to $50 from $47, which is 24% higher than current prices. According to Goldman, the upgrade is based on what the brokerage firm calls the company’s “hyper growth” potential. So, what does Goldman consider “hyper growth”? Goldman wrote that it expects the retailer, created to sell children’s apparel and accessories to moms who shop for deals online, will eclipse the $1 billion sales milestone this year. That feat would indeed be significant, especially considering the company has only been around for the past five years.  “If achieved, [Zulily] will join the company of Amazon (NASDAQ: AMZN) and Old Navy as the fastest retailers to reach this key milestone,” Goldman analysts wrote in their report. That’s high praise indeed, and extremely impressive for a retailer that does things much differently than either Amazon of Old… Read More