Whether you’re measuring by the latest economic data or just by the pickup in traffic at your local mall, it’s apparent the consumer is back in a big way — and that’s opening up a new way for investors to profit.#-ad_banner-#​ After the lingering economic downturn that followed the financial crisis, consumers are finally feeling confident enough to ramp up spending.  This improvement started in earnest during the final quarter of 2012, which marked the end of household deleveraging, according to the chief U.S. economist for Italian banking giant UniCredit.  During this quarter of change, the net worth of U.S. Read More

Whether you’re measuring by the latest economic data or just by the pickup in traffic at your local mall, it’s apparent the consumer is back in a big way — and that’s opening up a new way for investors to profit.#-ad_banner-#​ After the lingering economic downturn that followed the financial crisis, consumers are finally feeling confident enough to ramp up spending.  This improvement started in earnest during the final quarter of 2012, which marked the end of household deleveraging, according to the chief U.S. economist for Italian banking giant UniCredit.  During this quarter of change, the net worth of U.S. households rose 1.8%, marking the highest level since the first quarter of 2007.  In fact, the net worth of U.S. households rocketed 29% between the first quarter of 2009 and the fourth quarter of 2012, fueled by the soaring stock market and growth in housing. The stock market has continued its bullish ways throughout 2013, further boosting the consumer’s rebirth. According to the U.S. Bureau of Economic Analysis, personal consumption expenditures grew 0.2%, or nearly $25 billion, in September.   Long considered the most popular shopping day of the year, the day after Thanksgiving is known as Black Friday because… Read More

IPOs — initial public offerings of stock — are the financial world’s Super Bowl. The enthusiasm, anticipation, and chance to make millions out of seemingly nothing are what drive investor’s excitement.#-ad_banner-#​ In this year’s third quarter, the three top-performing IPOs were Sprouts Farmers Market (Nasdaq: SFM), Benefitfocus (Nasdaq: BNFT) and Rocket Fuel (Nasdaq: FUEL), up 123%, 102% and 93%, respectively, in their first day of trading. Even if you hadn’t heard of these three offerings, big-name IPOs such as Twitter (Nasdaq: TWTR) and Facebook (Nasdaq: FB) have been on nearly everyone’s radar due to massive media coverage. Not… Read More

IPOs — initial public offerings of stock — are the financial world’s Super Bowl. The enthusiasm, anticipation, and chance to make millions out of seemingly nothing are what drive investor’s excitement.#-ad_banner-#​ In this year’s third quarter, the three top-performing IPOs were Sprouts Farmers Market (Nasdaq: SFM), Benefitfocus (Nasdaq: BNFT) and Rocket Fuel (Nasdaq: FUEL), up 123%, 102% and 93%, respectively, in their first day of trading. Even if you hadn’t heard of these three offerings, big-name IPOs such as Twitter (Nasdaq: TWTR) and Facebook (Nasdaq: FB) have been on nearly everyone’s radar due to massive media coverage. Not only do many IPOs make the company’s founders and initial investors wealthy, initial offerings usually provide much-needed cash to expand operations (and increase shareholder value). The problem for most investors is that it’s difficult if not impossible to obtain IPO shares before they’re listed. These shares go to insiders and others with special relationships with the investment house issuing the shares. There are some “backdoor” ways in which regular investors can profit from the first day of an IPO: for example, in the case of Twitter’s IPO, investing in a high-tech incubator like Japan’s Digital Garage or a fund like… Read More

Investors in a certain global leader in medical equipment have been seen mildly erratic behavior (to put it nicely) from the stock over the better part of a decade. Shares rose from $40 in 2004 to highs of $75 in 2007 before sinking to $30 in 2009 and rebounding to $50 in 2011. Since then, the stock has steadily risen to its current level near $75. But while the stock was spinning its wheels over that nine-year period, the company was growing at a good clip. Annual revenue climbed a cumulative 29% between 2009 and 2012,… Read More

Investors in a certain global leader in medical equipment have been seen mildly erratic behavior (to put it nicely) from the stock over the better part of a decade. Shares rose from $40 in 2004 to highs of $75 in 2007 before sinking to $30 in 2009 and rebounding to $50 in 2011. Since then, the stock has steadily risen to its current level near $75. But while the stock was spinning its wheels over that nine-year period, the company was growing at a good clip. Annual revenue climbed a cumulative 29% between 2009 and 2012, to $8.7 billion. Net earnings jumped 17% in that time, to $1.3 billion. Last month, Stryker (NYSE: SYK) delivered rather uneven third-quarter numbers: Revenue rose 4.8% from a year ago, to $2.2 billion, but earnings fell more than 70%.#-ad_banner-# The revenue boost came from a revival in Stryker’s largest division, specifically in orthopedic implants used in hip and knee joint replacements. This division grew 9% in the third quarter, one of its strongest performances in some time. Most of the dip in earnings can be attributed to litigation related to a recall of Stryker’s ABG II and Rejuvenate hip implants… Read More

Dunkin’ Brands (Nasdaq: DNKN) has far outpaced the performance of the S&P 500 Index year to date, gaining nearly 48% compared with the broader index’s 26% gain.#-ad_banner-# Even more exciting is that if the shares can crack round-number resistance at $50, they are likely to challenge $60 in fairly short order. Since there is a well-defined stop-loss level at the major uptrend line, which intersects the chart just under $46, the reward-to-risk ratio is roughly 2.5 to 1, which is highly attractive. Dunkin’ Donuts, which has been around since 1950, is an American favorite. Through aggressive expansion, it is capturing… Read More

Dunkin’ Brands (Nasdaq: DNKN) has far outpaced the performance of the S&P 500 Index year to date, gaining nearly 48% compared with the broader index’s 26% gain.#-ad_banner-# Even more exciting is that if the shares can crack round-number resistance at $50, they are likely to challenge $60 in fairly short order. Since there is a well-defined stop-loss level at the major uptrend line, which intersects the chart just under $46, the reward-to-risk ratio is roughly 2.5 to 1, which is highly attractive. Dunkin’ Donuts, which has been around since 1950, is an American favorite. Through aggressive expansion, it is capturing an even larger domestic and international following. (My colleague David Goodboy is also a longtime fan of the company, as he wrote recently.) In its third quarter, the company, which also owns the Baskin-Robbins brand, added 222 new stores worldwide, 81 of which were U.S.-based Dunkin’ Donuts locations. There are now 7,500 Dunkin’ Donuts restaurants in the U.S. CEO Nigel Travis announced his goals of opening at least 15,000 Dunkin’ Donuts restaurants in the U.S., including 3,000 east of the Mississippi and 5,000 in Western states. That’s double the size of the current chain. At present, Dunkin’ Donuts is heavily… Read More

The number of Starbucks coffee shops that flooded the market during the mid-2000s was almost comical. In 2008, there were more than 230 Starbucks stores in New York City, with over 180 just in Manhattan. #-ad_banner-# There were literally Starbuckses right across the street from each other. As a coffee lover and Starbucks fanboy, I didn’t mind. But rapid expansion and market saturation turned out to be an unsustainable business model, which led to a large number of underperforming stores. As a result, Starbucks brought back former CEO Howard Schultz in 2008, and the company closed a number of U.S. Read More

The number of Starbucks coffee shops that flooded the market during the mid-2000s was almost comical. In 2008, there were more than 230 Starbucks stores in New York City, with over 180 just in Manhattan. #-ad_banner-# There were literally Starbuckses right across the street from each other. As a coffee lover and Starbucks fanboy, I didn’t mind. But rapid expansion and market saturation turned out to be an unsustainable business model, which led to a large number of underperforming stores. As a result, Starbucks brought back former CEO Howard Schultz in 2008, and the company closed a number of U.S. stores and ceased expansion efforts. Yet half a decade later, Starbucks (Nasdaq: SBUX) is back in full-blown growth mode. Despite concerns that Starbucks might again be hitting a saturation point, the coffee company is still very much a growth story. Starbucks has a number of growth levers it can pull this time around beyond just rapid store expansion. These include the company’s innovation on the food side and its single-serving products, Verismo and Teavana. With the likes of McDonald’s (NYSE: MCD), Tim Horton’s and Dunkin’ Donuts all fighting for a piece of the market, the competition in the coffee market… Read More

The cost of energy production isn’t just about money. There are also environment effects.#-ad_banner-# Last year, according to one environmental group, hydraulic fracturing (commonly known as fracking) alone generated an estimated 280 billion gallons of toxic wastewater, enough to flood Washington, D.C., to a depth of 22 feet. It’s no wonder that there’s a strong push to institute cleaner practices. Green initiatives have come to dominate the corporate landscape and are attracting investment flows in record numbers. The performance in alternative energy this year is evidence of this growing trend — the iShares S&P Global Clean… Read More

The cost of energy production isn’t just about money. There are also environment effects.#-ad_banner-# Last year, according to one environmental group, hydraulic fracturing (commonly known as fracking) alone generated an estimated 280 billion gallons of toxic wastewater, enough to flood Washington, D.C., to a depth of 22 feet. It’s no wonder that there’s a strong push to institute cleaner practices. Green initiatives have come to dominate the corporate landscape and are attracting investment flows in record numbers. The performance in alternative energy this year is evidence of this growing trend — the iShares S&P Global Clean Energy Fund (Nasdaq: ICLN) is up more than 50% year to date. While most of the attention has been focused on renewable energy and clean coal, environmentally friendly sectors like pollution and treatment controls have gone relatively unnoticed. Calgon Carbon Corp. (NYSE: CCC) is a small-cap stock involved in the purification and treatment of water, air and food, as well as the poisonous emissions from coal-fired power plants. The company has been making tremendous strides in cost reduction, improving operating margins to around 20% from 13.6% just a year ago. (Calgon’s leaner operation is one reason the research staff at… Read More

The first rule of running a biotech company: Don’t run low on cash. Once investors smell a cash squeeze coming, they’ll hammer shares mercilessly. That was the painful lesson learned by the executives at Dynavax Technologies (Nasdaq: DVAX). Though DVAX was pursuing the development of a very promising new vaccine, the company was burning through more than $15 million in cash every quarter and was at risk of not making it to the FDA finish line. Shares, which traded around $5 in October 2012, skidded all the way to $1. The good news is that the company shored up its… Read More

The first rule of running a biotech company: Don’t run low on cash. Once investors smell a cash squeeze coming, they’ll hammer shares mercilessly. That was the painful lesson learned by the executives at Dynavax Technologies (Nasdaq: DVAX). Though DVAX was pursuing the development of a very promising new vaccine, the company was burning through more than $15 million in cash every quarter and was at risk of not making it to the FDA finish line. Shares, which traded around $5 in October 2012, skidded all the way to $1. The good news is that the company shored up its balance sheet late last month, and shares have finally begun to rebound. And, with a few breaks, DVAX looks poised to rise from a recent $1.45 to $3, $4 or even $5. Little Company, Big Target Market DVAX has spent years developing Heplisav, which is a vaccine for hepatitis B, a disease that currently afflicts 240 million people around the world, according to the World Health Organization.#-ad_banner-# Though there are existing vaccines on the market, DVAX believes that Heplisav offers the promise of earlier and better protection with fewer doses than current vaccines. It appeared it was going… Read More

My dad is in his early 70s. I remember when he was in his 50s and would joke that when he retired, he would be glad to take the spare bunk in my youngest son’s room. Luckily, it hasn’t come to that.#-ad_banner-# Like many American seniors, he and my mother, also in her early 70s, are in excellent health and extremely active. They both still work full time. They’re not baby boomers. They’re part of the smaller pre-boomer generation that was born at the tail end of the Great Depression and during World War II. They have more in common… Read More

My dad is in his early 70s. I remember when he was in his 50s and would joke that when he retired, he would be glad to take the spare bunk in my youngest son’s room. Luckily, it hasn’t come to that.#-ad_banner-# Like many American seniors, he and my mother, also in her early 70s, are in excellent health and extremely active. They both still work full time. They’re not baby boomers. They’re part of the smaller pre-boomer generation that was born at the tail end of the Great Depression and during World War II. They have more in common with their parents than their younger boomer siblings or cousins. On the whole, they seem to be a little tougher, a little more independent and self-sufficient. Baby boomers, on the other hand, not so much. From the toy companies of the ’50s to the Big Pharma companies of the 1990s hawking erectile dysfunction cures, corporations and their shareholders have consistently profited in a big way by catering to the perceived immediate needs of the biggest bubble of the U.S. population — all 76 million of them, with another estimated 10,000 baby boomers turning 65 every day over the next 16… Read More

One of the coolest things about the stock market is that money can be made regardless of the direction of a stock. I’ve often heard investors lament that they missed a sharp upward move. Often, these same investors will commit the investing sin of chasing stocks that have made extreme short-term moves to the upside in the hope of momentum carrying shares even higher. While upward momentum can and does take stocks higher, more often than not, prices will quickly retrace the upward spike.#-ad_banner-# This leaves the stock chasers jumping from one hot stock to the next, wondering why many… Read More

One of the coolest things about the stock market is that money can be made regardless of the direction of a stock. I’ve often heard investors lament that they missed a sharp upward move. Often, these same investors will commit the investing sin of chasing stocks that have made extreme short-term moves to the upside in the hope of momentum carrying shares even higher. While upward momentum can and does take stocks higher, more often than not, prices will quickly retrace the upward spike.#-ad_banner-# This leaves the stock chasers jumping from one hot stock to the next, wondering why many of their investments are losers. One solution to this dilemma is to learn how to short. Shorting allows investors to profit from downward moves in price. For those of you unfamiliar with shorting stocks, my recent article on shorting biotech stocks  describes the method. The same tactic can be applied to any stock, regardless of sector. Stocks that have spiked higher often drop in price. This is particularly true if the increase is due to questionable news, hype or other dubious reasons. Just like the stock chasers, short sellers scan the market for stocks that have soared higher in a… Read More

$388.5 billion is a staggering figure. It’s more than the entire economy of Thailand, Denmark, Colombia or the United Arab Emirates. And it’s how much operating cash flow was generated by America’s top 12 companies in 2012. Source: Thomson Reuters Of course, the old adage “It takes money to make money” applies. Many of these companies need to spend billions of dollars in research, infrastructure and other areas to generate that cash flow, and their actual take-home pay is a lot less. Exxon Mobil (NYSE: XOM), for example, spent more than $34 billion on capital expenditures last… Read More

$388.5 billion is a staggering figure. It’s more than the entire economy of Thailand, Denmark, Colombia or the United Arab Emirates. And it’s how much operating cash flow was generated by America’s top 12 companies in 2012. Source: Thomson Reuters Of course, the old adage “It takes money to make money” applies. Many of these companies need to spend billions of dollars in research, infrastructure and other areas to generate that cash flow, and their actual take-home pay is a lot less. Exxon Mobil (NYSE: XOM), for example, spent more than $34 billion on capital expenditures last year, sapping a considerable chunk of its $56 billion in operating cash flow. As a bit of silver lining, these companies spend much of that on goods and services offered by other companies, creating a virtuous circle of corporate spending. Here are the top 12 capex spenders of 2013. Source: Thomson Reuters The number of oil and gas firms in this group explains why an energy services provider like Schlumberger (NYSE: SLB) sports a $120 billion market value, but is not truly a household name. The True Measure Unfortunately, even as many Wall Street analysts wisely… Read More