This is a great time to be running a public company.#-ad_banner-#​ The surging stock market has created billions in wealth for the leading officers and directors, as previously granted stock options are now deep in the money. Of course, companies don’t like to publicize the fact that executives are reaping huge gains while leading the share count to bloat. Add all of their shares into the current base of stock, and investors would really be up in arms. That’s why many companies offset these lush stock options programs with share buybacks. As long as they are able to keep the… Read More

This is a great time to be running a public company.#-ad_banner-#​ The surging stock market has created billions in wealth for the leading officers and directors, as previously granted stock options are now deep in the money. Of course, companies don’t like to publicize the fact that executives are reaping huge gains while leading the share count to bloat. Add all of their shares into the current base of stock, and investors would really be up in arms. That’s why many companies offset these lush stock options programs with share buybacks. As long as they are able to keep the share count flat, investors are unlikely to grumble too loudly. But it also means that you should be skeptical when you hear about buyback announcements. Case in point: Regional bank KeyCorp (NYSE: KEY), which conducted a pair of buyback plans over the past two years totaling nearly $800 million. That equated to nearly 5% of shares outstanding. But in a study conducted by Deutsch Bank, KeyCorp actually shrank its share count by just 1%. In effect, most of that $800 million went toward enriching executives, not shareholders. That’s why it’s crucial to track companies to see if they are really… Read More

Newport, R.I., is the small seaside town where the titans of industry such as John Rockefeller, J.P. Morgan and Andrew Carnegie used their great wealth to build castlelike vacation homes during the Gilded Age of American capitalism. Although sometimes derided as robber barons, these industrial leaders helped build America into the bastion of free enterprise it is today.#-ad_banner-#​ Between 1860 and 1900, the U.S. economy expanded 400%, fueled by vastly improved technology, hands-off government policy and the growth of monopolies. Along with the industrial moguls, many regular investors who held shares in the monopolies also became wealthy. Just imagine being… Read More

Newport, R.I., is the small seaside town where the titans of industry such as John Rockefeller, J.P. Morgan and Andrew Carnegie used their great wealth to build castlelike vacation homes during the Gilded Age of American capitalism. Although sometimes derided as robber barons, these industrial leaders helped build America into the bastion of free enterprise it is today.#-ad_banner-#​ Between 1860 and 1900, the U.S. economy expanded 400%, fueled by vastly improved technology, hands-off government policy and the growth of monopolies. Along with the industrial moguls, many regular investors who held shares in the monopolies also became wealthy. Just imagine being a investor during the Gilded Age, knowing that you owned shares in a company that basically ruled its industry.   Most U.S.-based monopolies have long since been regulated out of existence in name of fair competition. However, there are a few near-monopolies that are still creating vast wealth for investors. These natural monopolies and duopolies were in the right place at the right time to gain significant market share. Although there is competition, some of these companies are so far advanced compared with their competition that it would take governmental intervention to knock them off their perches.   StreetAuthority co-founder… Read More

Just as every fisherman has stories about the big one that got away, every investor has “woulda, coulda, shoulda” tales of investments that would have been wildly profited wildly if they had only purchased. I myself have one such tale from the past year. It gnaws at my insides to think about the massive profits that I missed out on, even though I felt a strong conviction to buy. The good news is that it’s not too late to jump on board.#-ad_banner-# This stock was trading near $65 in 2007 before the financial crisis knocked it down below $5. The… Read More

Just as every fisherman has stories about the big one that got away, every investor has “woulda, coulda, shoulda” tales of investments that would have been wildly profited wildly if they had only purchased. I myself have one such tale from the past year. It gnaws at my insides to think about the massive profits that I missed out on, even though I felt a strong conviction to buy. The good news is that it’s not too late to jump on board.#-ad_banner-# This stock was trading near $65 in 2007 before the financial crisis knocked it down below $5. The price wallowed in the nowhere zone under $5 for several years before slipping into penny-stock territory below $1. Although this company was (and is) majority owned and controlled by the U.S. government, most investors had written it off as not viable. At one point, the stock price fell to less than a dime a share. The price collapse caused the company to be delisted from the New York Stock Exchange, relegating its shares to the over-the-counter market.  I considered buying shares in the $0.15 area, thinking that there was no place for this once-mighty quasi-government agency to go but up. Read More

What do Ray Kroc and Jack Welch have in common? Both of these men ran very different businesses, McDonalds (NYSE: MCD) and General Electric (NYSE: GE), respectively, yet they repeatedly hammered home the most important lesson for their management teams. “Market share is everything.”  It holds the key to great financial results, which can provide the capital for yet more growth. Or as Jack Welch once put it, if you aren’t going to dominate your niche, then don’t even bother. He was likely inspired by a 1… Read More

What do Ray Kroc and Jack Welch have in common? Both of these men ran very different businesses, McDonalds (NYSE: MCD) and General Electric (NYSE: GE), respectively, yet they repeatedly hammered home the most important lesson for their management teams. “Market share is everything.”  It holds the key to great financial results, which can provide the capital for yet more growth. Or as Jack Welch once put it, if you aren’t going to dominate your niche, then don’t even bother. He was likely inspired by a 1975 study in the Harvard Business Review that found that “as market share increases, a business is likely to have a higher profit margin, a declining purchases-to-sales ratio, a decline in marketing costs as a percentage of sales, higher quality, and higher-priced products.” Need proof? Simply look at the hamburger chains. According to QSR (quick-service restaurant) magazine, McDonald’s had as much domestic market share in 2010 as Burger King (NYSE: BKW), Wendy’s (Nasdaq: WEN), Sonic (Nasdaq: SONC), Jack in the Box (Nasdaq: JACK), and the next seven burger sellers — combined.  And look at what that meant… Read More

For investors looking to buy stock in a clothing retailer, it would normally be a no-brainer to consider stalwarts like Wal-Mart (NYSE: WMT), Target (NYSE: TGT), well-known dollar stores, or other discount merchandisers. But things aren’t normal, and they haven’t been for years. Since the economy just can’t seem to shift into a higher gear, I’d avoid Wal-Mart and the other types of clothing outlets I just mentioned. Their sales come mainly from middle- and lower-income consumers, the people who have suffered most in the years since the financial crisis and who… Read More

For investors looking to buy stock in a clothing retailer, it would normally be a no-brainer to consider stalwarts like Wal-Mart (NYSE: WMT), Target (NYSE: TGT), well-known dollar stores, or other discount merchandisers. But things aren’t normal, and they haven’t been for years. Since the economy just can’t seem to shift into a higher gear, I’d avoid Wal-Mart and the other types of clothing outlets I just mentioned. Their sales come mainly from middle- and lower-income consumers, the people who have suffered most in the years since the financial crisis and who continue to see their spending power dwindle. #-ad_banner-# Rising costs, stagnant or shrinking wages, and lousy or non-existent benefits are squeezing these groups hard, Wal-Mart and other discounters could well be facing years of erosion in revenue and earnings growth rates. At this point, for example, Wal-Mart’s sales are growing at only about 3% a year, from around $406 billion in 2009 to just over $473 billion now. That’s pretty anemic compared with 2004 through 2008, when sales rose at a healthy 7.9% clip. The way things are going, I wouldn’t be surprised if annual sales and profits at Wal-Mart… Read More

The life of a Wall Street analyst can be vexing.  Hedge fund managers will take your call only if you have a can’t-miss idea to put in front of them. The analysts push their investment committees to help their cause by designating certain stocks as a top pick, or in the case of Goldman Sachs, they get the stock added to the Conviction List. Yet here’s the trouble with this back-and-forth between analysts and fund managers: If a stock pick doesn’t work out, they must yank it from the list and admit defeat. As an example, Goldman Sachs… Read More

The life of a Wall Street analyst can be vexing.  Hedge fund managers will take your call only if you have a can’t-miss idea to put in front of them. The analysts push their investment committees to help their cause by designating certain stocks as a top pick, or in the case of Goldman Sachs, they get the stock added to the Conviction List. Yet here’s the trouble with this back-and-forth between analysts and fund managers: If a stock pick doesn’t work out, they must yank it from the list and admit defeat. As an example, Goldman Sachs just gave up on its Conviction List rating for The Fresh Market (NYSE: TFM), a smaller and less established rival to Whole Foods Market (NYSE: WFM). Since TFM was first added to Goldman’s coveted group of Conviction List stocks in February, it has fallen 15% while the S&P 500 Index has risen 20%. The one-year performance for TFM has been even weaker. #-ad_banner-#​Yet it’s the reasoning behind the rating change that should spook any investors that are bullish on Whole Foods. “TFM’s expansion into more competitive markets will weigh on results, and rising… Read More

Black Friday, Nov. 29, is less than a week away. The iconic day can be described as one of numbers: Millions of bargain hunters will spend hours upon hours waiting in lines to spend billions to walk away with the best deals. This year, U.S. Black Friday sales are expected to total about $13.6 billion, a 3.9% increase from last year, according to IbisWorld research. There’s one sure winner to emerge from this buying frenzy. And no, it’s not necessarily Wal-Mart (NYSE: WMT) or Target (NYSE: TGT). In my mind, it’s the credit card companies who really benefit. Read More

Black Friday, Nov. 29, is less than a week away. The iconic day can be described as one of numbers: Millions of bargain hunters will spend hours upon hours waiting in lines to spend billions to walk away with the best deals. This year, U.S. Black Friday sales are expected to total about $13.6 billion, a 3.9% increase from last year, according to IbisWorld research. There’s one sure winner to emerge from this buying frenzy. And no, it’s not necessarily Wal-Mart (NYSE: WMT) or Target (NYSE: TGT). In my mind, it’s the credit card companies who really benefit. In 2011, the National Retail Federation found Americans primarily use credit cards to fuel their Black Friday buying binges. In 2012, MasterCard (NYSE: MA) reported a 26.2% increase in retail transactions compared to the previous year tied to Black Friday purchases.#-ad_banner-# With tight budgets prevailing again this year, MA may receive another boost as consumers choose to hoard their cash and put purchases on their cards. But it’s not just Black Friday, or even U.S. retail sales, that is driving MA higher. Currently, over 1.9 billion people worldwide use a MasterCard, and the card is accepted at over 35.9 million… Read More

Imagine if Ford (NYSE: F) offered up its assembly lines to Chrysler. Or if Apple (Nasdaq: AAPL) started building computers for Microsoft (Nasdaq: MSFT).#-ad_banner-# Well, semiconductor giant Intel (Nasdaq: INTC) is pursuing just such a move. The chipmaker has built up so much excess manufacturing capacity that is now looking to make chips — for other chipmakers.  The Wall Street Journal recently reported that “Intel’s fabs would be open ‘to any company able to utilize our leading-edge silicon.'” It’s a painful but necessary move. Intel has spent billions on its various fabrication plants (“fabs,” for… Read More

Imagine if Ford (NYSE: F) offered up its assembly lines to Chrysler. Or if Apple (Nasdaq: AAPL) started building computers for Microsoft (Nasdaq: MSFT).#-ad_banner-# Well, semiconductor giant Intel (Nasdaq: INTC) is pursuing just such a move. The chipmaker has built up so much excess manufacturing capacity that is now looking to make chips — for other chipmakers.  The Wall Street Journal recently reported that “Intel’s fabs would be open ‘to any company able to utilize our leading-edge silicon.'” It’s a painful but necessary move. Intel has spent billions on its various fabrication plants (“fabs,” for short) and simply can’t afford to let them sit idle. Trouble is, it’s a crowded field. Firms such as Taiwan Semiconductor Manufacturing (NYSE: TSM) and Samsung already operate chip foundries for firms such as Apple and Broadcom (Nasdaq: BRCM) that choose to go “fab”-less (that is, outsource their production). To help snag customers, analysts think Intel will need to beef up its sales proposition by offering the ability to design and test chips — a key series of steps before production can actually begin. And that has put the spotlight on the leading players in field known as electronic design… Read More

What do a small manufacturing company, a major Internet powerhouse and a West-Coast robotics firm have in common? According to Andy Obermueller, they’re all sitting on some of the biggest ground-breaking technologies of the next 10 years. #-ad_banner-#As Chief Investment Strategist for Game-Changing Stocks, Andy’s job at StreetAuthority is to hunt down companies with the potential to produce the next life-changing investing idea. By finding and investing in these stocks before they become the “next big thing,” Andy (and his subscribers) has been able to lock in enormous gains from some of the market’s biggest game-changing trends. Take one of… Read More

What do a small manufacturing company, a major Internet powerhouse and a West-Coast robotics firm have in common? According to Andy Obermueller, they’re all sitting on some of the biggest ground-breaking technologies of the next 10 years. #-ad_banner-#As Chief Investment Strategist for Game-Changing Stocks, Andy’s job at StreetAuthority is to hunt down companies with the potential to produce the next life-changing investing idea. By finding and investing in these stocks before they become the “next big thing,” Andy (and his subscribers) has been able to lock in enormous gains from some of the market’s biggest game-changing trends. Take one of Andy’s most recent “game-changers” — Gogo Inc. (Nasdaq: GOGO), for example. ​Andy originally brought the $2 billion tech stock to his subscribers’ attention in August of this year. At the time, Andy thought the company’s in-flight Internet connectivity technology would take the airline industry by storm. Turns out he was right… Just two months after his recommendation, Gogo shocked the market by reporting third quarter revenue of $85.4 million — smashing analyst estimates of $76.8 million. The announcement sent Gogo on a triple-digit rally… But as excited as we are about Gogo and the future of… Read More

The head-and-shoulders (H&S) top is one of the best-known patterns in technical analysis. This pattern was first written about in 1930 by a financial editor at Forbes magazine who described how the H&S forms and how it can be traded. Many readers are familiar with the H&S pattern. On a price chart, there will be three peaks in price at the end of the uptrend, with the center peak (the head) being higher than the other two. The peaks on the sides (the shoulders) should be about equal in height. Connecting the bottom of the peaks gives us… Read More

The head-and-shoulders (H&S) top is one of the best-known patterns in technical analysis. This pattern was first written about in 1930 by a financial editor at Forbes magazine who described how the H&S forms and how it can be traded. Many readers are familiar with the H&S pattern. On a price chart, there will be three peaks in price at the end of the uptrend, with the center peak (the head) being higher than the other two. The peaks on the sides (the shoulders) should be about equal in height. Connecting the bottom of the peaks gives us the neckline, and breaking the neckline is the sell signal. Real H&S patterns rarely resemble the precise line diagrams seen in books, and the chart below shows one that occurred in real market conditions. The shoulders are nearly, but not quite, the same height. The problem with charts is that their interpretation is subjective. Many traders find an H&S in almost every chart they look at because some traders tend to see whatever they want to see. Because traders see what they want to see, results vary. Some may find success looking at charts while others will suffer… Read More