Despite a bunch of new stats, trends and regulations circulating about the housing market, nothing points to its definitive direction in 2014.#-ad_banner-#​ That leaves prospective homebuyers, home sellers, loan candidates, banks, real estate agents and investors scratching their heads. Making matters more confusing is that even the experts can’t agree or seem to be analyzing the numbers differently. Perhaps a quick review the trends might help clarify the issues at hand. I’ll start with the good news, but a word of warning: The potential bad news that follows could be devastating — and the possibility of the 30-year-fixed… Read More

Despite a bunch of new stats, trends and regulations circulating about the housing market, nothing points to its definitive direction in 2014.#-ad_banner-#​ That leaves prospective homebuyers, home sellers, loan candidates, banks, real estate agents and investors scratching their heads. Making matters more confusing is that even the experts can’t agree or seem to be analyzing the numbers differently. Perhaps a quick review the trends might help clarify the issues at hand. I’ll start with the good news, but a word of warning: The potential bad news that follows could be devastating — and the possibility of the 30-year-fixed rate rising to 5% by the end of 2014 may be the least of your worries. So, without further ado, here’s some good news: A pair of U.S. agencies recently reported that October new-home sales rose 25% from the previous month. Market analyst Trulia says that November’s asking home prices rose 12.1% year over year, up in 98 of the 100 largest U.S. metro areas. And though Case-Shiller data for November won’t be released until Dec. 31, Zillow predicts it will reveal a 13.9% year-over-year increase for the month.  Perhaps the most comprehensive positive comments about 2014 came from Freddie… Read More

Every quarter, many of us in the investing world eagerly anticipate the SEC filings that the world’s largest (and greatest) investment managers are required to file. #-ad_banner-# There is no single 13F that is more eagerly anticipated than that of Berkshire Hathaway’s (NYSE: BRK-B) Warren Buffett. The Oracle of Omaha isn’t just one of the greatest stock pickers the world has ever seen. He is also one of the most selective. He seldom makes a significant new addition to his portfolio, usually instead preferring to add to existing positions or buy nothing at all. So when he makes a big… Read More

Every quarter, many of us in the investing world eagerly anticipate the SEC filings that the world’s largest (and greatest) investment managers are required to file. #-ad_banner-# There is no single 13F that is more eagerly anticipated than that of Berkshire Hathaway’s (NYSE: BRK-B) Warren Buffett. The Oracle of Omaha isn’t just one of the greatest stock pickers the world has ever seen. He is also one of the most selective. He seldom makes a significant new addition to his portfolio, usually instead preferring to add to existing positions or buy nothing at all. So when he makes a big purchase of a new stock, it’s kind of a big deal. In the most recent quarter, Buffett revealed a rare new portfolio addition: Exxon Mobil (NYSE: XOM) — for a cool $3.4 billion. Even for Buffett, that’s a big purchase. Investors have been scrambling to answer two questions: Why is Buffett was buying Exxon — and why now? Buffett has been familiar with Exxon for decades, so what’s changed about the company that merits a $3.4 billion investment from Berkshire? It certainly isn’t because Exxon’s stock price has dropped: Exxon’s shares are actually close to all-time highs, and… Read More

With stocks at all times highs, we’re starting to hear a lot of experts tout that equities are trading at “premium valuations” — which is financial lingo meaning stocks are expensive relative to their underlying earnings. While those pundits are partially correct, there’s more to the story… #-ad_banner-#The recent rally has pushed the price-to-earnings ratio (P/E) ratio for the S&P 500 from 13 in 2011 to its current value of 16. While the move is dramatic, valuations are still nowhere near the soaring levels we normally see during most market bubbles. For example, before the 2001 “Dot Com” collapse, the… Read More

With stocks at all times highs, we’re starting to hear a lot of experts tout that equities are trading at “premium valuations” — which is financial lingo meaning stocks are expensive relative to their underlying earnings. While those pundits are partially correct, there’s more to the story… #-ad_banner-#The recent rally has pushed the price-to-earnings ratio (P/E) ratio for the S&P 500 from 13 in 2011 to its current value of 16. While the move is dramatic, valuations are still nowhere near the soaring levels we normally see during most market bubbles. For example, before the 2001 “Dot Com” collapse, the S&P’s P/E ratio reached 46.1 before crashing back down. So while the recent rally is impressive, there’s still little reason to believe we’re nearing a “market crash” similar to that which we experienced in 2001 and 2008… Until that starts to change, we remain bullish on stocks. Sure, many stocks have become expensive, but a few remain absolute bargains. For example, certain small-cap stocks still have plenty of upside potential when compared to the broader market. No, I’m not talking about fly-by-night penny stocks — I’m talking about companies that are on the ground floor of a promising new trend… Read More

Even with the rapid rise in new and exciting technological devices, one thing’s for sure: People love watching TV. It doesn’t matter when or where — or on what device.#-ad_banner-# The companies that provide the infrastructure for viewing content across a large and growing variety of devices are frequently overlooked. Harmonic (Nasdaq: HLIT), a market leader in video-on-demand services, is one such company. Harmonic has many opportunities to expand its market share, especially with the proliferation of video on demand and high-definition TV. Yet the biggest opportunity for Harmonic is in the expansion of pay-TV services in international markets. The… Read More

Even with the rapid rise in new and exciting technological devices, one thing’s for sure: People love watching TV. It doesn’t matter when or where — or on what device.#-ad_banner-# The companies that provide the infrastructure for viewing content across a large and growing variety of devices are frequently overlooked. Harmonic (Nasdaq: HLIT), a market leader in video-on-demand services, is one such company. Harmonic has many opportunities to expand its market share, especially with the proliferation of video on demand and high-definition TV. Yet the biggest opportunity for Harmonic is in the expansion of pay-TV services in international markets. The emergence of the global middle class is leading the demand for pay-TV services, which has compelled providers to expand their content offerings. Harmonic sells high-performance video infrastructure products that enable content providers to efficiently create and deliver a full range of video services to consumer devices, including TVs, PCs, tablets and smartphones. Its revenues are generated from selling video processing solutions to various media companies and providers, including broadcasters (HBO, NBC, ESPN), satellite providers (Dish (Nasdaq: DISH), DirecTV (Nasdaq: DTV)), telcos (SingTel, Vodafone (Nasdaq: VOD)), cable providers (Charter (Nasdaq: CHTR), Cox, Comcast (Nasdaq: CMCSA)) and new media (Amazon.com… Read More

They say investing in the stock market is all about forward thinking. That’s certainly the case with the biotech sector. A biotech’s pipeline can mean the difference between boom and bust.#-ad_banner-# The Medicines Co. (Nasdaq: MDCO) is a global biotech company with seven drugs in the pipeline that could prove to be big hits in the acute and intensive care hospital product market. The company’s key legacy product and top revenue generator, Angiomax, continues to bring in profits, and in addition to its robust in-house development pipeline, the company also recently teamed up with two major drug companies and made… Read More

They say investing in the stock market is all about forward thinking. That’s certainly the case with the biotech sector. A biotech’s pipeline can mean the difference between boom and bust.#-ad_banner-# The Medicines Co. (Nasdaq: MDCO) is a global biotech company with seven drugs in the pipeline that could prove to be big hits in the acute and intensive care hospital product market. The company’s key legacy product and top revenue generator, Angiomax, continues to bring in profits, and in addition to its robust in-house development pipeline, the company also recently teamed up with two major drug companies and made a key acquisition — all of which should only further accelerate  its growth. The biggest factor keeping Medicines below what I consider its fair value is its ongoing lawsuit with Hospira (NYSE: HSP). In 2010, Hospira sued to market its generic version of Angiomax before Medicines’ patents expire. A decision is expected next year, but regardless of the outcome, Medicines could lose its Angiomax exclusivity as soon as mid-2015. What many investors are missing is that Medicines appears to have a bright future despite its legal fight over Angiomax, thanks to the clinical successes within its pipeline. When Angiomax does… Read More

There are some 75 million small and midsize businesses around the world. If they plan on competing in an increasingly connected world of mobile devices and e-commerce, they’ll all need to have an online presence.  More than three-fourths of these 75 million SMBs don’t have a basic website — so this market is grossly underserved. Endurance International Group (Nasdaq: EIGI), which recently went public, is looking to change this.#-ad_banner-# Endurance is one of the U.S.’s top hosting companies, with a number of brands, including HostGator and Bluehost. Since its October IPO, EIGI is up 10%, and a number… Read More

There are some 75 million small and midsize businesses around the world. If they plan on competing in an increasingly connected world of mobile devices and e-commerce, they’ll all need to have an online presence.  More than three-fourths of these 75 million SMBs don’t have a basic website — so this market is grossly underserved. Endurance International Group (Nasdaq: EIGI), which recently went public, is looking to change this.#-ad_banner-# Endurance is one of the U.S.’s top hosting companies, with a number of brands, including HostGator and Bluehost. Since its October IPO, EIGI is up 10%, and a number of positive aspects make the company a compelling growth investment.  Endurance estimates its share of the SMB website market at 5%, which means there’s a lot of room for growth. But the company offers more than just website hosting. Endurance’s variety of products and services — including Web hosting, on-demand computing, security, marketing solutions and site analytics — is relatively unrivaled in the space, allowing it to serve a broad array of companies.  In addition to the services listed above, Endurance also has its Mojo Marketplace product, which allows companies to develop software solutions and sell them to any number… Read More

As company executives sit down to establish their 2014 strategies, they’re faced with a sobering prospect: The U.S. economy is likely headed for yet another year of subpar growth. It’s a theme I discussed a few weeks ago and the prospects of deeper government cutbacks, as a result of the current “sequester” policy, could even lead to even more anemic growth. #-ad_banner-#Indeed, more than half of the companies in the S&P 500 are expected to boost 2014 sales by less than 5%. Still, there are nearly two-dozen firms capable of defying economic gravity. Each of these firms… Read More

As company executives sit down to establish their 2014 strategies, they’re faced with a sobering prospect: The U.S. economy is likely headed for yet another year of subpar growth. It’s a theme I discussed a few weeks ago and the prospects of deeper government cutbacks, as a result of the current “sequester” policy, could even lead to even more anemic growth. #-ad_banner-#Indeed, more than half of the companies in the S&P 500 are expected to boost 2014 sales by less than 5%. Still, there are nearly two-dozen firms capable of defying economic gravity. Each of these firms is expected to boost sales at least 20% in the year ahead. To be sure, some of these companies are resorting to acquisitions to boost sales. These include: • InterContinental Exchange (NYSE: ICE), which is expected to more than double in size thanks to a merger with the NYSE. • Tenet Healthcare (NYSE: THC), which is expected to see a 46% jump in revenue thanks to a recently-completed acquisition of Vanguard Health Services. • NRG Energy’s (NYSE: NRG) recent move to acquire assets from the bankrupt Edison Mission Energy will also lead to a sizable 29% spike… Read More

As the Thanksgiving weekend wound to a close Sunday night, I happened to watch the “60 Minutes” interview with Jeff Bezos, the billionaire CEO of Amazon.com (Nasdaq: AMZN).#-ad_banner-#​ At the end of the interview Bezos unveiled a “surprise” for correspondent Charlie Rose and his TV viewers, revealing that Amazon is working on building flying drones that can deliver packages directly to customers. I thought that was maybe a bit far-fetched, but certainly interesting. However, the media grabbed onto the drone story and ran with it. All day Monday, every news channel I watched — financial and… Read More

As the Thanksgiving weekend wound to a close Sunday night, I happened to watch the “60 Minutes” interview with Jeff Bezos, the billionaire CEO of Amazon.com (Nasdaq: AMZN).#-ad_banner-#​ At the end of the interview Bezos unveiled a “surprise” for correspondent Charlie Rose and his TV viewers, revealing that Amazon is working on building flying drones that can deliver packages directly to customers. I thought that was maybe a bit far-fetched, but certainly interesting. However, the media grabbed onto the drone story and ran with it. All day Monday, every news channel I watched — financial and otherwise — was talking about Bezos, Amazon and drones. Bezos certainly knows how to create a buzz. What has yet to be seen is whether he can generate profits for Amazon shareholders. The Buzz Is Great — How About Some Profits? Amazon is a fantastic and innovative company. I don’t dispute that for a minute — I think that’s an inarguable fact. But another fact that I think investors should be aware of is that this company does not generate significant profits or free cash flow. It is a bit hard to believe considering that the company is well… Read More

Real estate is in my blood. My first job, when I was 8 years old, was working for my grandfather rehabbing single-family homes and small apartment buildings for his one-man investment company. I remember being paid a dollar an hour and thinking how rich I would be on payday.#-ad_banner-#​ What I didn’t understand at the time was that the work wasn’t about the trivial jobs I learned to hate. It was more about the start of a learning process. He was teaching me the value of hard work and the ability to find opportunities in the most distressed situations. The… Read More

Real estate is in my blood. My first job, when I was 8 years old, was working for my grandfather rehabbing single-family homes and small apartment buildings for his one-man investment company. I remember being paid a dollar an hour and thinking how rich I would be on payday.#-ad_banner-#​ What I didn’t understand at the time was that the work wasn’t about the trivial jobs I learned to hate. It was more about the start of a learning process. He was teaching me the value of hard work and the ability to find opportunities in the most distressed situations. The most important thing I learned is that there are dozens of creative ways to earn profits with real estate. From the 1960s until about 2007, real estate was truly the golden goose for many Americans, commonly believed to be a can’t-lose investment. Prices seemed to always be climbing higher, and even after short pullbacks, the uptrend resumed quickly.  Then, in 2007, the bottom fell out of the market. Many investors were forced into bankruptcy as their overleveraged properties plunged in value, and many homeowners lost their homes in the perfect storm of extended leverage meeting plummeting prices. This situation forced… Read More

My 62-year-old aunt called me in a panic a couple of months ago. “I’m worried about the market crashing because of the government shutdown.”#-ad_banner-#​ Sensing she was just looking for a little reassurance, I proceeded to tell her that I viewed any short-term weakness as a great chance to buy. I explained that not only is the trend still higher in the short run but that in the long run, stocks spend a lot more time going up than down. She conceded that made a lot of sense. But she still wanted to proceed with… Read More

My 62-year-old aunt called me in a panic a couple of months ago. “I’m worried about the market crashing because of the government shutdown.”#-ad_banner-#​ Sensing she was just looking for a little reassurance, I proceeded to tell her that I viewed any short-term weakness as a great chance to buy. I explained that not only is the trend still higher in the short run but that in the long run, stocks spend a lot more time going up than down. She conceded that made a lot of sense. But she still wanted to proceed with caution, adding that the only stock she wanted to buy was leading domestic drugstore company CVS Caremark (NYSE: CVS). Although she didn’t realize it, my aunt was making a big statement about blue chips. They make investors feel safe. They’re less volatile than smaller companies. And with the S&P 500 Index trading at an all-time high, blue chips are in demand from investors looking to curb equity risk. That’s why I want to share one of my favorite blue chips. Walgreen Co. (NYSE: WAG) is a virtual blueprint of what to look for in a great blue chip. So far,… Read More