The number of consumers participating in recreational activities has declined over the past half decade, in part because people have been looking to save as much money as possible. However, as discretionary money starts flowing back into consumers’ pockets, what better way to spend that money than on recreational activities? A higher level of disposable income should help drive spending on recreation and outdoor activities higher in 2014. Wal-Mart (NYSE: WMT) and Amazon.com (Nasdaq: AMZN) sell various apparel and recreational equipment, but one of the best plays in the market is a one-stop shop that offers a cornucopia of sports… Read More

The number of consumers participating in recreational activities has declined over the past half decade, in part because people have been looking to save as much money as possible. However, as discretionary money starts flowing back into consumers’ pockets, what better way to spend that money than on recreational activities? A higher level of disposable income should help drive spending on recreation and outdoor activities higher in 2014. Wal-Mart (NYSE: WMT) and Amazon.com (Nasdaq: AMZN) sell various apparel and recreational equipment, but one of the best plays in the market is a one-stop shop that offers a cornucopia of sports gear, Dick’s Sporting Goods (NYSE: DKS). Beyond that, this particular recreational retailer has a number of growth levers that it is set to pull in 2014.#-ad_banner-# Dick’s operates the Dick’s Sporting Goods and Golf Galaxy retail brands, covering 44 states with over 600 locations. With its variety of sports apparel and equipment, the company will be one of the biggest benefactors of rising employment and personal income — but the story that investors should really be excited about is on the growth side. Earnings per share (EPS) and sales for Dick’s fiscal year (which ended in October) bested consensus estimates,… Read More

We are losing the battle of the bulge. Though health care practitioners have been trying to raise awareness about the perils of obesity for a decade, the numbers keep getting worse. According to a survey conducted by Gallup-Healthways, 27.2% of all Americans are classified as obese, up a full percentage point from 2012. A stunning 32.5% of people ages 45 to 64 are considered obese. Those figures go hand in hand with rising rates of diabetes and hypertension. Although investors had been pinning their hopes on obesity drugs offered by Vivus (Nasdaq: VVUS), Orexigen Therapeutics (Nasdaq: OREX) and Arena Pharmaceuticals… Read More

We are losing the battle of the bulge. Though health care practitioners have been trying to raise awareness about the perils of obesity for a decade, the numbers keep getting worse. According to a survey conducted by Gallup-Healthways, 27.2% of all Americans are classified as obese, up a full percentage point from 2012. A stunning 32.5% of people ages 45 to 64 are considered obese. Those figures go hand in hand with rising rates of diabetes and hypertension. Although investors had been pinning their hopes on obesity drugs offered by Vivus (Nasdaq: VVUS), Orexigen Therapeutics (Nasdaq: OREX) and Arena Pharmaceuticals (Nasdaq: ARNA), the fact that all three of those stocks still trade below $10 — despite many years of hype — shows that pill-based approaches have been underwhelming.#-ad_banner-# Little-known EnteroMedics (Nasdaq: ETRM) may have come up with a better approach. The company has developed an implantable device that impedes signals coming from the vagus nerve. EnteroMedics’ VBLOC (vagal blocking therapy) keeps the stomach from sending the brain a message that it’s time to eat. Though the company has already received regulatory approval in Australia and Europe, it’s the U.S. market that represents the holy grail for EnteroMedics, simply because the… Read More

Forget almost everything you learned about investing over the past few years.#-ad_banner-# The past 48 months have been characterized by sluggish U.S. economic growth, a helping hand from the Federal Reserve, global scares, and a steadily rising U.S. stock market. Yet as we head into 2014, many of these variables will no longer apply — and how you adjust to these changes can spell the difference between profits, losses or merely capital preservation. Sustainable 3% Growth? The U.S. economy surged an impressive 4.1% in the third quarter, thanks in large part to inventory restocking. That led economists to assume… Read More

Forget almost everything you learned about investing over the past few years.#-ad_banner-# The past 48 months have been characterized by sluggish U.S. economic growth, a helping hand from the Federal Reserve, global scares, and a steadily rising U.S. stock market. Yet as we head into 2014, many of these variables will no longer apply — and how you adjust to these changes can spell the difference between profits, losses or merely capital preservation. Sustainable 3% Growth? The U.S. economy surged an impressive 4.1% in the third quarter, thanks in large part to inventory restocking. That led economists to assume that fourth-quarter GDP growth would be notably weaker, especially as further inventory stocking was unlikely. Yet in recent weeks, it’s become apparent that the economy is on track for a second straight quarter of robust GDP growth. Economists at Deutsche Bank now anticipate 3.8% GDP growth in the quarter just ended (which they will revise after digesting an international trade report due Jan. 7). Two consecutive quarters of GDP growth above 3% is quite unusual. It’s happened only once in the past five years (the fourth quarter of 2011 and the first quarter of 2012). The economy subsequently rose, on… Read More

Let’s be honest. When you hear about a stock that yields 12% or more, your first thought should be that the company is probably a basket case that can’t even turn a profit. If it’s offering a yield that sounds too good to be true, it probably is. #-ad_banner-#And you’d be right most of the time. Usually, yields are this high because a company’s share price is falling — signaling underlying problems in its business. A lower share price gives a higher dividend yield. That means profitable companies paying yields this high should be rare. In fact, my staff and… Read More

Let’s be honest. When you hear about a stock that yields 12% or more, your first thought should be that the company is probably a basket case that can’t even turn a profit. If it’s offering a yield that sounds too good to be true, it probably is. #-ad_banner-#And you’d be right most of the time. Usually, yields are this high because a company’s share price is falling — signaling underlying problems in its business. A lower share price gives a higher dividend yield. That means profitable companies paying yields this high should be rare. In fact, my staff and I recently ran the numbers. When we looked only at the companies that turned a profit over the past year, we found just 25 U.S. common stocks paying yields of more than 12%.  Here, you can see the 10 highest yields for yourself:   Ticker Company Yield CXW Corrections Corp. 24.2% MFA MFA Financial 22.7% ARR ARMOUR Residential 22.3% AGNC American Capital 21.9% ISSC Innovative Solutions 20.4% AMTG Apollo Residential 19.2% GNI Great Northern Iron Ore 17.2% EFC Ellington Financial 16.8% IVR… Read More

We all remember the subprime mortgage crisis. The financial system was thrown into chaos, and many homeowners lost their overleveraged homes during those dark days.#-ad_banner-#​ Fortunately, the vast powers of the Federal Reserve were summoned to help stabilize the housing market, and along with it, the entire economy. The Fed worked its monetary magic, and the housing market is finally returning to normal. However, there is another crisis brewing just under the surface.  The sector this potential crisis is in isn’t as large as the subprime mortgage sector, but it’s still a $27 billion sector,… Read More

We all remember the subprime mortgage crisis. The financial system was thrown into chaos, and many homeowners lost their overleveraged homes during those dark days.#-ad_banner-#​ Fortunately, the vast powers of the Federal Reserve were summoned to help stabilize the housing market, and along with it, the entire economy. The Fed worked its monetary magic, and the housing market is finally returning to normal. However, there is another crisis brewing just under the surface.  The sector this potential crisis is in isn’t as large as the subprime mortgage sector, but it’s still a $27 billion sector, according to Forbes magazine. In fact, Forbes reports that 1 in 4 Americans may be participants in this potential crisis. I became aware of this potential time bomb last year. A close friend was financially destroyed by the subprime mortgage crisis. He is an investor and was overleveraged on more than a dozen investment properties. He was finally forced to declare bankruptcy to get out from under the mountain of debt.  Within a week of the bankruptcy filing, he started getting letters from companies like Wells Fargo (NYSE: WFC) and General Motors (NYSE: GM). While my friend was used to… Read More

Thanks to a popular financial website, the term “alpha” has become popular over the past few years. Yet the ETF industry wants you to think a lot more about “beta.” #-ad_banner-# Dozens of new exchange-traded funds were launched in 2013 in an emerging category known as “smart beta,” and investors will be treated to many more of these ETFs in the coming year. It’s a welcome development for an industry that risked growing stale. While the term “alpha” refers to any gains an investor can reap above the broader market, beta refers to how… Read More

Thanks to a popular financial website, the term “alpha” has become popular over the past few years. Yet the ETF industry wants you to think a lot more about “beta.” #-ad_banner-# Dozens of new exchange-traded funds were launched in 2013 in an emerging category known as “smart beta,” and investors will be treated to many more of these ETFs in the coming year. It’s a welcome development for an industry that risked growing stale. While the term “alpha” refers to any gains an investor can reap above the broader market, beta refers to how a stock or fund should be expected to perform relative to a given benchmark. In recent years, investors have had plenty of options among ETFs that can be expected to trade in a predictable fashion. From S&P 500 index funds to technology funds to high-yield bond funds, these passively managed ETFs are a great way to provide predictable exposure at a very low cost. These ETFs have emerged as great values, especially in relation to higher-cost actively managed mutual funds, which can carry expense ratios exceeding 2%. Now, this new class of smart-beta ETFs — which also go by terms… Read More

Easy access to data and charting software has contributed to information overload for many investors. Some investors will spend time looking for the perfect chart while other investors will review charts that really contain nothing of value.#-ad_banner-# Many of the charts we see are useless. And although we don’t believe there is a perfect chart that will identify every market turning point in advance, we find there are some charts that can better help investors understand what to do in the market. It is important to remember that successful investing is not easy. It requires an edge, which… Read More

Easy access to data and charting software has contributed to information overload for many investors. Some investors will spend time looking for the perfect chart while other investors will review charts that really contain nothing of value.#-ad_banner-# Many of the charts we see are useless. And although we don’t believe there is a perfect chart that will identify every market turning point in advance, we find there are some charts that can better help investors understand what to do in the market. It is important to remember that successful investing is not easy. It requires an edge, which can be defined as a unique and repeatable insight into the behavior of markets. To succeed, you will need to understand what your edge is, and a true edge in the markets will not include information that is widely available. You will not find an edge simply by looking at the price-to-earnings (P/E) ratio for a stock or spotting a buy signal with a widely followed technical indicator like stochastics. Old traders summarize this problem with a memorable saying: “To know what everyone knows is to know nothing.” Rather than spending time reviewing what everyone knows,… Read More

Individual investors often point to the long-term success of Warren Buffett as proof that value investing works. They are correct, and Buffett is just one example of the many long-term investors who have found success with value investing.  However, although value investing can work, many investors fail to succeed with this strategy.#-ad_banner-# I think the reason value investing is so difficult to implement is because it is challenging to define exactly what “value” means. Some investors use the price-to-earnings (P/E) ratio and buy when the P/E ratio is low. Others search for stocks with low price-to-sales (P/S) ratio in… Read More

Individual investors often point to the long-term success of Warren Buffett as proof that value investing works. They are correct, and Buffett is just one example of the many long-term investors who have found success with value investing.  However, although value investing can work, many investors fail to succeed with this strategy.#-ad_banner-# I think the reason value investing is so difficult to implement is because it is challenging to define exactly what “value” means. Some investors use the price-to-earnings (P/E) ratio and buy when the P/E ratio is low. Others search for stocks with low price-to-sales (P/S) ratio in their hunt for value. In addition to these two tools, there are dozens of other ways to measure value. In the right hands, and with enough time, any disciplined approach to value investing should work in the long term. Another well-known investing strategy is buy-and-hold, or index, investing, which is an admission on the part of the individual that they cannot beat the market and are willing to accept all of the losses in a bear market with no chance of outperforming in a bull market. Momentum, or relative strength (RS), investing is a less widely… Read More

Although almost any market action can be explained away — in hindsight — some trends will remain a deep mystery.#-ad_banner-#​ Major biotech stocks rallied sharply throughout 2013, as I noted in this column, but smaller biotechs inexplicably sold off sharply after Labor Day. My view: In the absence of any clear explanation of why smaller biotechs should suddenly fall deeply out of favor, lower stock prices should lead investors to give these stocks a fresh look. Indeed, that scenario played out as expected. Since my mid-November profile of Regulus Therapeutics (Nasdaq: RGLSD), Threshold Phama (Nasdaq: THLD) and Synergy… Read More

Although almost any market action can be explained away — in hindsight — some trends will remain a deep mystery.#-ad_banner-#​ Major biotech stocks rallied sharply throughout 2013, as I noted in this column, but smaller biotechs inexplicably sold off sharply after Labor Day. My view: In the absence of any clear explanation of why smaller biotechs should suddenly fall deeply out of favor, lower stock prices should lead investors to give these stocks a fresh look. Indeed, that scenario played out as expected. Since my mid-November profile of Regulus Therapeutics (Nasdaq: RGLSD), Threshold Phama (Nasdaq: THLD) and Synergy Pharma (Nasdaq: SGYP), these three stocks have rebounded, 24%, 12% and 31% respectively. That’s an impressive six-week rally, and likely signals that this out-of-favor sector is rotating back into favor. I think these three stocks remain undervalued and will be tracking them in the year ahead. With that in mind, here are three other biotechs that have massive potential upside, according to the Wall Street analysts who follow them. 1. Esperion Therapeutics (Nasdaq: ESPR )​ This firm is developing a new drug, ETC-1002, that has shown great promise in treating people with high cholesterol for whom statins have not been helpful or have had problematic… Read More

If you’ve been in the market this year, you are likely pretty happy with your results. Indeed, the bias this year has been all about the bulls, and until we see the price action reflect otherwise, the big winners are likely to keep on giving in 2014. #-ad_banner-# For traders like me who love to ride strong momentum stocks during bull markets, I think the best place to put new capital to work is in those big winners trading at or near new highs. One tech stock that fits this description perfectly is Micron Technology (NASDAQ: MU). The company is… Read More

If you’ve been in the market this year, you are likely pretty happy with your results. Indeed, the bias this year has been all about the bulls, and until we see the price action reflect otherwise, the big winners are likely to keep on giving in 2014. #-ad_banner-# For traders like me who love to ride strong momentum stocks during bull markets, I think the best place to put new capital to work is in those big winners trading at or near new highs. One tech stock that fits this description perfectly is Micron Technology (NASDAQ: MU). The company is one of the largest makers of computing memory chips in the world, but you don’t have to have a very long memory to know that the stock has been a trader’s dream of late. Year to date, MU has delivered a gain of nearly 245%, an incredible run for a large-cap tech stock that’s been around for some time. And though shares are more than 50% above their long-term, 200-day moving average, there have been scant episodes this year where traders got scared and sold the stock off because it was perceived as being overbought. From a fundamental… Read More