Just as in the film “Groundhog Day,” my day starts the same way every day.  #-ad_banner-#I pore through dozens of Wall Street reports to stay abreast of the key issues and trends impacting various industries and companies. While boning up on the issues, I also seek out Wall Street’s preferred… Read More

As investors flood out of momentum stocks, they’re looking for safety. There aren’t many safe places to invest. #-ad_banner-#But one place that’s been depressed for a number of years is infrastructure. And this area of the market has a lot of pent-up demand — and a number of growth opportunities. So investors looking to take refuge from the momentum stock sell-off might want to take a look at heavy-equipment makers, which offer some of the best exposure to the rebound in infrastructure spending. Begun as a shipping company more than a century ago, Manitowoc Co. (NYSE: MTW) is… Read More

As investors flood out of momentum stocks, they’re looking for safety. There aren’t many safe places to invest. #-ad_banner-#But one place that’s been depressed for a number of years is infrastructure. And this area of the market has a lot of pent-up demand — and a number of growth opportunities. So investors looking to take refuge from the momentum stock sell-off might want to take a look at heavy-equipment makers, which offer some of the best exposure to the rebound in infrastructure spending. Begun as a shipping company more than a century ago, Manitowoc Co. (NYSE: MTW) is now one of the top crane and food-service equipment manufacturers in the world. The company got out of the shipping business in 2008 and now focuses on cranes and food-service equipment, which account for about 60% and 40% of revenue, respectively. Shares of Manitowoc have recovered from the lows they saw after the real estate bubble burst, but MTW is still 40% off the all-time highs it set in 2007. Similarly, Manitowoc’s crane revenues were close to $1 billion a quarter back in 2008 but tumbled to only $450 million in mid-2010. Crane sales last quarter came in at $466… Read More

Near the end of 2012, investors began to question whether drugstore chain Rite Aid (NYSE: RAD) had much of a future.  #-ad_banner-#Shares traded for just $1 — a price point that often signals possible bankruptcy ahead — as the company’s staggering $6.3 billion debt load looked set to eventually cripple the company. Rite Aid had completed its fiscal year back in February 2012, and in that year, the company had just $128 million in operating income and $529 million in interest expense. Adding insult to injury, Rite Aid was in the midst of a sales… Read More

Near the end of 2012, investors began to question whether drugstore chain Rite Aid (NYSE: RAD) had much of a future.  #-ad_banner-#Shares traded for just $1 — a price point that often signals possible bankruptcy ahead — as the company’s staggering $6.3 billion debt load looked set to eventually cripple the company. Rite Aid had completed its fiscal year back in February 2012, and in that year, the company had just $128 million in operating income and $529 million in interest expense. Adding insult to injury, Rite Aid was in the midst of a sales slump, as revenues fell in three of the four years leading up to fiscal 2013. That’s why even at just $1 a share, this was one of the most heavily shorted stocks on the market. Yet Rite Aid never ended up in bankruptcy. Management pulled out every stop to ensure that operating profits would rise to the level of interest expense — and then surpass it… which is the only way a debt-laden business can survive over the long term. Rite Aid Takes Control Of Its Debt Rising cash flow enabled Rite Aid… Read More

Luxury electric vehicle maker Tesla Motors (Nasdaq: TSLA) failed to wow investors when it reported first-quarter results last week. A sell-off followed that took the stock down to a technically critical level. #-ad_banner-#Purely looking at the numbers, Tesla did well: Earnings per share (EPS) of $0.12 beat analyst expectations of $0.10. Tesla delivered 6,457 cars during the quarter, slightly beating its guidance of 6,400, and it produced a record 7,535 vehicles. The company stuck with its previous full-year guidance for around 35,000 vehicle deliveries. In February, TSLA rallied on the back of news that the company is planning to build… Read More

Luxury electric vehicle maker Tesla Motors (Nasdaq: TSLA) failed to wow investors when it reported first-quarter results last week. A sell-off followed that took the stock down to a technically critical level. #-ad_banner-#Purely looking at the numbers, Tesla did well: Earnings per share (EPS) of $0.12 beat analyst expectations of $0.10. Tesla delivered 6,457 cars during the quarter, slightly beating its guidance of 6,400, and it produced a record 7,535 vehicles. The company stuck with its previous full-year guidance for around 35,000 vehicle deliveries. In February, TSLA rallied on the back of news that the company is planning to build a so-called Gigafactory to achieve economies of scale in battery production. According to the company, The Gigafactory “is designed to reduce cell costs much faster than the status quo and, by 2020, produce more lithium-ion batteries annually than were produced worldwide in 2013.” TSLA fully retraced this rally in ensuing weeks, but many analysts seemed focused on the Gigafactory’s progress during last week’s conference call. CEO Elon Musk said that plans for the factory are on track and that the company will break ground on the first two projects in June. Musk also said that Panasonic, a well-known battery supplier,… Read More

Earlier this month, over 35,000 people flocked to the “Woodstock for Capitalists” just for a chance to sit in on a six-hour Q&A with the world’s greatest investor — Warren Buffett. To give you an idea of what kind of spectacle this is, just look at sales for Berkshire-owned Nebraska Furniture Mart located in Omaha where the Berkshire Hathaway shareholder meeting takes place every year. In the week surrounding the prestigious shareholder meeting, Nebraska Furniture Mart did over $40 million in sales… which is typically what they do in one month. #-ad_banner-#The shareholder meeting is one of the greatest financial-education… Read More

Earlier this month, over 35,000 people flocked to the “Woodstock for Capitalists” just for a chance to sit in on a six-hour Q&A with the world’s greatest investor — Warren Buffett. To give you an idea of what kind of spectacle this is, just look at sales for Berkshire-owned Nebraska Furniture Mart located in Omaha where the Berkshire Hathaway shareholder meeting takes place every year. In the week surrounding the prestigious shareholder meeting, Nebraska Furniture Mart did over $40 million in sales… which is typically what they do in one month. #-ad_banner-#The shareholder meeting is one of the greatest financial-education experiences in the world. Attendees get peppered with useful financial information about not only Berkshire, but investing and the economy as a whole. Here are a few great tips that he shared at his recent shareholder meeting. Using Insurance “Float” For Success “Our investment in the insurance companies reflects a first major step in our efforts to achieve a more diversified base of earning power.” — 1967 Annual Report Insurance is Berkshire’s core operation and the engine that has consistently propelled their expansion since 1967. Its first insurance endeavor began with the purchase of National Indemnity for $8.6 million… Read More

One thing that I have grown to appreciate about investing is that it is a pursuit that you get better at over time.    #-ad_banner-#This is a game in which experience counts. And there is no experience that provides a better source of investment lessons than the mistakes you’ve made yourself. Mistakes aren’t always those of commission (although I’ve made plenty of those). There are also errors of omission, as in things that you didn’t do but should have. For example, in 2004, when Google (Nasdaq: GOOG) had its IPO, a friend of mine pounded the table and told me… Read More

One thing that I have grown to appreciate about investing is that it is a pursuit that you get better at over time.    #-ad_banner-#This is a game in which experience counts. And there is no experience that provides a better source of investment lessons than the mistakes you’ve made yourself. Mistakes aren’t always those of commission (although I’ve made plenty of those). There are also errors of omission, as in things that you didn’t do but should have. For example, in 2004, when Google (Nasdaq: GOOG) had its IPO, a friend of mine pounded the table and told me that I “had to own” the company. I thought he was crazy because to me Google looked very expensive on both a price-to-earnings (P/E) and price-to-cash flow basis. I was wrong. While Google did look expensive relative to other companies, it was not even close to being expensive relative to its future earning power. What I didn’t appreciate was that Google had a tremendous moat around its business and massive growth in front of it. Google’s share price went from $50 in 2004 to well over $500 today. The lesson I learned is that it is worth paying up (within… Read More

When it comes to investing, I’m a huge fan of “boring.” That is, I appreciate companies with crucial but more obscure products that are so much a part of our daily lives that most people wouldn’t even think of them as investments. Take Packaging Corp. of America (NYSE: PKG), which makes about the most boring things you could ever think of — cardboard boxes and other types of packaging. Yet as I pointed out when I profiled the company in April, its stock has triple-digit upside during the next five years. #-ad_banner-#So does another “boring” stock I’d like… Read More

When it comes to investing, I’m a huge fan of “boring.” That is, I appreciate companies with crucial but more obscure products that are so much a part of our daily lives that most people wouldn’t even think of them as investments. Take Packaging Corp. of America (NYSE: PKG), which makes about the most boring things you could ever think of — cardboard boxes and other types of packaging. Yet as I pointed out when I profiled the company in April, its stock has triple-digit upside during the next five years. #-ad_banner-#So does another “boring” stock I’d like to tell you about. I’ll leave it up to you to decide if the underlying company’s main products, high-efficiency residential and commercial water heaters, are as boring as cardboard. But I think it’s safe to say they don’t spark the imagination the way 3-D printing, wearable computers, mobile banking, e-cigarettes and other emerging products do. Still, the investment potential of this firm, A.O. Smith Corp. (NYSE: AOS), is very exciting. Its stock has generated some outstanding returns already, rising nearly 350% during the past five years. And I think the price could easily double again in the next five years. Read More

I never thought I’d get an investment idea from the movie “Wayne’s World.” I didn’t at first. It took me about 20 years to realize it. #-ad_banner-#A while ago, I was kibitzing with a money manager friend of mine about some of the names he was picking up. Tim Hortons (NYSE: THI), the Canadian coffee and doughnut shop chain, was at the top of his list. “Oh!” I said. “There was a scene there in ‘Wayne’s World.’ ” My friend smiled and corrected me: The scene I was thinking of was actually set at Stan Mikita’s Doughnuts, a fictional shop… Read More

I never thought I’d get an investment idea from the movie “Wayne’s World.” I didn’t at first. It took me about 20 years to realize it. #-ad_banner-#A while ago, I was kibitzing with a money manager friend of mine about some of the names he was picking up. Tim Hortons (NYSE: THI), the Canadian coffee and doughnut shop chain, was at the top of his list. “Oh!” I said. “There was a scene there in ‘Wayne’s World.’ ” My friend smiled and corrected me: The scene I was thinking of was actually set at Stan Mikita’s Doughnuts, a fictional shop based on Tim Hortons. An iconic brand in Canada, the real Tim Hortons was founded in Ontario in 1964 by pro hockey star Tim Horton and a retired police officer, Ron Joyce. Sadly, Horton died in a car crash in 1974 — before he could witness the chain’s unlikely rise. The company now boasts over 4,300 restaurants throughout Canada, the U.S. and the Middle East. The menu has stretched beyond doughnuts and coffee — to specialty coffee drinks, teas, homestyle lunches and other baked goods. And the stock has satisfied return-hungry investors: The stock has gained an average… Read More

Carl Icahn is a notoriously headstrong man. He never hesitates to shame, cajole and coerce CEOs until they start following his advice. Icahn’s cage-rattling approach has surely led to some impressive investment returns. #-ad_banner-#While Icahn still grabs many headlines when he browbeats companies like Apple (Nasdaq: AAPL) until they announce share buybacks large enough to satisfy him, an up-and-comer in the hedge fund industry has taken a very different approach.  Mark Rachesky, who worked for Icahn earlier in his career, has become known as a “passive activist.” He follows the Icahn playbook by pursuing undervalued companies that can take steps to… Read More

Carl Icahn is a notoriously headstrong man. He never hesitates to shame, cajole and coerce CEOs until they start following his advice. Icahn’s cage-rattling approach has surely led to some impressive investment returns. #-ad_banner-#While Icahn still grabs many headlines when he browbeats companies like Apple (Nasdaq: AAPL) until they announce share buybacks large enough to satisfy him, an up-and-comer in the hedge fund industry has taken a very different approach.  Mark Rachesky, who worked for Icahn earlier in his career, has become known as a “passive activist.” He follows the Icahn playbook by pursuing undervalued companies that can take steps to unlock value — but he takes those steps as an insider, not an outsider. Rachesky’s approach could be described by the adage “You can catch more flies with honey than vinegar.” The Studio Standoff Icahn and Rachesky actually squared off a few years ago over film studio Lions Gate Entertainment (NYSE: LGF). Icahn wanted the company to either take value-unlocking steps or sell him the company outright. Lions Gate was also being targeted by Rachesky, but in a much calmer manner.  After repeated pushbacks from Lions Gate, Icahn lost the will to fight and sold his shares in the… Read More

Stocks have been unable to gain any real upside traction and remain stuck below critical resistance areas. On Tuesday, the market once again tumbled, led by the consumer discretionary and financial sectors. #-ad_banner-#Year to date, financials are flat, lagging behind utilities, basic materials and health care stocks, but outperforming technology. As the largest industry in the economy, the financial sector — which includes brokers, banks and insurance companies — matters a great deal to the tone of the overall U.S. stock market. Taking note of how big financial stocks trade is important to understanding the trend in the… Read More

Stocks have been unable to gain any real upside traction and remain stuck below critical resistance areas. On Tuesday, the market once again tumbled, led by the consumer discretionary and financial sectors. #-ad_banner-#Year to date, financials are flat, lagging behind utilities, basic materials and health care stocks, but outperforming technology. As the largest industry in the economy, the financial sector — which includes brokers, banks and insurance companies — matters a great deal to the tone of the overall U.S. stock market. Taking note of how big financial stocks trade is important to understanding the trend in the broader stock market. On top of my watch list, Morgan Stanley (NYSE: MS) has a permanent spot on one of my eight monitors. It is one of my go-to stocks because it often gives me clues as to the broader market’s near- to medium-term direction. I check the trading action in MS at least three to four times a day, because more often than not, any sharp reversal or relative strength or weakness in the stock can quickly infect the broader market.  On an intraday basis, it rarely pays to short stocks when financials are strong, nor does it make… Read More