“Only when the tide goes out do you discover who’s been swimming naked.” That’s one of my favorite Warren Buffet quotes. It could probably mean lots of things when it comes to investing. But I think it’s a great analogy for earnings seasons. #-ad_banner-#Earnings season is when shareholders and fund managers find out which companies have been connecting and which have been striking out. Right now, it looks like most of the S&P 500 has been swimming naked. America’s largest and most powerful companies are struggling to grow revenue and earnings. According to data from Zacks… Read More

“Only when the tide goes out do you discover who’s been swimming naked.” That’s one of my favorite Warren Buffet quotes. It could probably mean lots of things when it comes to investing. But I think it’s a great analogy for earnings seasons. #-ad_banner-#Earnings season is when shareholders and fund managers find out which companies have been connecting and which have been striking out. Right now, it looks like most of the S&P 500 has been swimming naked. America’s largest and most powerful companies are struggling to grow revenue and earnings. According to data from Zacks Investment research, with 482 companies from the S&P 500 reporting second-quarter results, revenue is up 0.1% from the same period last year while earnings are down 3.6%.  That marks the fifth consecutive quarter that earnings have contracted compared to the same period last year. The last time that happened was in 2008 and 2009 during the financial crisis. However, despite the slow overall growth, a good investor knows there’s always a bull market somewhere. That includes the S&P 500. Despite earnings recession, there are a handful of companies that are bucking the trend. These companies are reporting record revenue and… Read More

Barry Sternlicht knows a thing or two about real estate. The Harvard Business School grad got started early, buying up more than 7,000 residential apartment units in the early 1990s at fire-sale prices following the savings and loan crisis.  Soon after, he signed a mega-deal with real estate tycoon Sam Zell, exchanging many of these apartments for an ownership stake in Zell’s Equity Residential (NYSE: EQR). This transaction ultimately netted Sternlicht (and his investors) handsome triple-digit returns. But that was just the beginning for this savvy investor and the company he founded, Starwood Capital.  #-ad_banner-#Starwood later built an empire of… Read More

Barry Sternlicht knows a thing or two about real estate. The Harvard Business School grad got started early, buying up more than 7,000 residential apartment units in the early 1990s at fire-sale prices following the savings and loan crisis.  Soon after, he signed a mega-deal with real estate tycoon Sam Zell, exchanging many of these apartments for an ownership stake in Zell’s Equity Residential (NYSE: EQR). This transaction ultimately netted Sternlicht (and his investors) handsome triple-digit returns. But that was just the beginning for this savvy investor and the company he founded, Starwood Capital.  #-ad_banner-#Starwood later built an empire of luxury hotels, amassing a global portfolio of more than 1,200 resorts under upscale brands such as Westin, Sheraton, St. Regis, and Le Meridien. Incidentally, it sold this collection to Marriott last year for $13.6 billion.  Elsewhere, Starwood has made big investments in retail shopping malls in Sweden, suburban office parks in South Florida, and undeveloped land parcels in California. As I discussed last month with my High-Yield Investing premium subscribers, Starwood has also teamed up with Colony Capital to create Colony Starwood Homes (NYSE: SFR), which owns 35,000 rental homes. Sternlicht helped orchestrate this venture, which has already generated gains… Read More

Big pharma has some great long-term drivers, ranging from aging demographics to a growing middle-class around the world. Few products reach a level of importance as high as the drugs that keep us alive and healthy. It’s especially true as we get older, and that’s something happening to a record number of people these days. #-ad_banner-#Yet one more benefit of drug stocks is the counter-cyclical nature of sales. While people may skimp on everything from cars to tech when the economy turns sour, they aren’t going to stop taking their prescriptions.  In fact, my favorite pharma stock booked annualized growth… Read More

Big pharma has some great long-term drivers, ranging from aging demographics to a growing middle-class around the world. Few products reach a level of importance as high as the drugs that keep us alive and healthy. It’s especially true as we get older, and that’s something happening to a record number of people these days. #-ad_banner-#Yet one more benefit of drug stocks is the counter-cyclical nature of sales. While people may skimp on everything from cars to tech when the economy turns sour, they aren’t going to stop taking their prescriptions.  In fact, my favorite pharma stock booked annualized growth in sales of 11% over the three years through 2009. With a global economic outlook that’s looking pretty weak, that revenue resilience is a huge plus for investors. Looking at the industry, one company stood out for its pipeline of upcoming drugs and the potential for higher profits over the next few years. A Blockbuster Pipeline And Higher Profits Make This Leader My Top Pick Big pharma is all about the pipeline, and my top pick is no different. The company had a solid reputation for its R&D until a steep patent cliff in 2014 had investors worried. In… Read More

If you own a smartphone you are probably familiar with automated notifications. From convenient reminders that you’ve used up almost all of your data for the month, to messages asking you to verify an account, to alerts from health apps, these notifications help make everyday life easier.  Not only is this issue’s Project Alpha pick the secret behind these communications services, but it also dominates this niche market despite its small market cap. West Corporation (Nasdaq: WSTC)is a global telecommunications provider with a broad portfolio of product offerings ranging from 9-1-1 call processing to enterprise conferencing services to notification… Read More

If you own a smartphone you are probably familiar with automated notifications. From convenient reminders that you’ve used up almost all of your data for the month, to messages asking you to verify an account, to alerts from health apps, these notifications help make everyday life easier.  Not only is this issue’s Project Alpha pick the secret behind these communications services, but it also dominates this niche market despite its small market cap. West Corporation (Nasdaq: WSTC)is a global telecommunications provider with a broad portfolio of product offerings ranging from 9-1-1 call processing to enterprise conferencing services to notification systems in healthcare facilities.  West operates in five main segments generating sales of more than $2.2 billion, with its conferencing and collaboration services segment contributing to roughly half of the firm’s revenue. As the largest provider of conferencing and collaboration solutions in the world, West managed over 65 billion telephony minutes and facilitated over 167 million conference calls in 2015 for prominent clients such as IBM (NYSE: IBM), Alphabet (Nasdaq: GOOGL), Microsoft (Nasdaq: MSFT), and Cisco (Nasdaq: CSCO).  In 2015, the unified communications segment generated $1.5 billion in revenues and contributed to 82.9% of the firm’s operating income. Read More

When Walt Disney moved to Los Angeles in 1923 and created Disney Brothers Studio, he had little to his name, having already failed with a previous studio company.  His legacy is now worth a market cap of $157 billion, spanning film, TV, sports and theme parks. In the last five years alone, shares of The Walt Disney Company (NYSE: DIS) have jumped 235% as the entertainment powerhouse uses its reach to dominate multiple industries. #-ad_banner-#The rise of China and 1.35 billion consumers could bring the next Disney story, and one of the world’s richest men already has plans for creating his… Read More

When Walt Disney moved to Los Angeles in 1923 and created Disney Brothers Studio, he had little to his name, having already failed with a previous studio company.  His legacy is now worth a market cap of $157 billion, spanning film, TV, sports and theme parks. In the last five years alone, shares of The Walt Disney Company (NYSE: DIS) have jumped 235% as the entertainment powerhouse uses its reach to dominate multiple industries. #-ad_banner-#The rise of China and 1.35 billion consumers could bring the next Disney story, and one of the world’s richest men already has plans for creating his empire.  He’s got the ear of the Chinese government and a $30 billion-plus head start on building the next global entertainment dynamo. From Property Development To Entertainment Empire The Dalian Wanda Group is already the world’s largest property developer, and now has its sight set on developing a global entertainment business to rival any other. The company is developing six theme parks in China, as well as hotel and tourism properties internationally.   The company also owns Infront Sports & Media, a media and marketing company for international sporting events and federations. The company represents 170 rights holders, including… Read More

The chorus of investing gurus sounding the alarm on bubbles in both the bond and stock market grows almost daily. It started as early as last year with Vanguard founder Jack Bogle warning that stocks could return as little as 6% annually over the next decade based on record low interest rates and overvaluation. #-ad_banner-#​DoubleLine Capital Chief Executive Jeffrey Gundlach said last month that investors have entered, “a world of uber complacency,” recommending that investors sell everything and that the stock market should be, “down massively.” The $100 billion L.A.-based asset manager also went “maximum negative” on U.S. Treasuries, marking… Read More

The chorus of investing gurus sounding the alarm on bubbles in both the bond and stock market grows almost daily. It started as early as last year with Vanguard founder Jack Bogle warning that stocks could return as little as 6% annually over the next decade based on record low interest rates and overvaluation. #-ad_banner-#​DoubleLine Capital Chief Executive Jeffrey Gundlach said last month that investors have entered, “a world of uber complacency,” recommending that investors sell everything and that the stock market should be, “down massively.” The $100 billion L.A.-based asset manager also went “maximum negative” on U.S. Treasuries, marking a familiar alarm among smart money that investors may find no safety in bonds either. Bond guru Bill Gross has previously been critical of the massive monetary programs by central banks globally and told Bloomberg this month that it’s, “devolved into Ponzi finance,” and have become, “promises that can never be kept.” Looking at valuations, the Janus Capital Manager said he doesn’t like bonds or most stocks, but admitted that investors need to put their money to work.  In fact, against the potential for the financial system to “implode”, Gross said the Janus Unconstrained Fund is holding just 5% in… Read More

I’ve written quite a bit this year about China’s economic transition. Michael Spence, the Nobel Prize-winning economist, calls it the middle-income transition, when a company moves from a developing economy to an advanced economy. #-ad_banner-#For China, this means a shift away from exports and export-based growth and toward domestic consumption. We’ve seen this evidenced in the rise in wages and also in the rise in the amount that services contribute to GDP. But for those of you still not convinced of this economic shift, let’s take a look at the multi-billion-dollar deal that just happened in China. From Bloomberg: “Uber… Read More

I’ve written quite a bit this year about China’s economic transition. Michael Spence, the Nobel Prize-winning economist, calls it the middle-income transition, when a company moves from a developing economy to an advanced economy. #-ad_banner-#For China, this means a shift away from exports and export-based growth and toward domestic consumption. We’ve seen this evidenced in the rise in wages and also in the rise in the amount that services contribute to GDP. But for those of you still not convinced of this economic shift, let’s take a look at the multi-billion-dollar deal that just happened in China. From Bloomberg: “Uber Technologies Inc. is selling its China operations to fierce rival Didi Chuxing, ending an expensive price war and freeing it up to focus on other markets and possibly an initial public offering. The truce brings to an end a bruising battle between the two companies for leadership in China’s fast-growing ride-hailing market. Uber has already lost $2 billion in China in two years there, people familiar with the matter have said, prompting investors to pressure the company to cut a deal. As part of the arrangement, Didi will invest $1 billion in Uber’s global company, people familiar with the matter… Read More

Everywhere you look there seems to be malaise about global economic growth and the outlook for markets. Forecasts for economic growth are continuously downgraded, and more than a third of global bonds carry a negative yield as investors rush to safety. However, digging deeper in the data uncovers a market disconnect between this wall of worry and a booming global payments processing industry.  #-ad_banner-#Visa Inc. (NYSE: V) beat expectations to report a 10% increase in global payment volume and a “remarkably steadfast consumer in the face of significant global instability.”  Here in my office in Colombia, I’m watching the shift… Read More

Everywhere you look there seems to be malaise about global economic growth and the outlook for markets. Forecasts for economic growth are continuously downgraded, and more than a third of global bonds carry a negative yield as investors rush to safety. However, digging deeper in the data uncovers a market disconnect between this wall of worry and a booming global payments processing industry.  #-ad_banner-#Visa Inc. (NYSE: V) beat expectations to report a 10% increase in global payment volume and a “remarkably steadfast consumer in the face of significant global instability.”  Here in my office in Colombia, I’m watching the shift to a cashless society happen first hand as people get tired of carrying large stacks of bills and instead opt for credit and debit cards. This shift in emerging markets could carry global payment growth, with Boston Consulting Group (BCG) forecasting as much as $900 billion in transaction-based revenue growth up for grabs through 2024. One market leader is taking advantage of the Brexit shakeup to snap up a competitor at a 12% discount, expanding its global footprint. Even better, its board just authorized a massive share buyback, and earnings this year could be well over expectations. Consumers Seem Unaffected… Read More

With the market hitting new highs recently, investors should be weary of small-cap stocks. That’s because when the market inevitably turns, it’s usually smaller stocks that lead the charge in either direction. #-ad_banner-#But while investors should be cautious about small-cap stocks in general, my colleague Andy Obermueller has identified one that could be an exception. Back in August of last year, Andy highlighted a little-known company called Amplify (NYSE: BETR), an Austin, Texas-based snack food company. Amplify’s best-selling product is Skinny Pop, a healthy form of popcorn. But it also makes a host of other health-conscious foods for consumers. When… Read More

With the market hitting new highs recently, investors should be weary of small-cap stocks. That’s because when the market inevitably turns, it’s usually smaller stocks that lead the charge in either direction. #-ad_banner-#But while investors should be cautious about small-cap stocks in general, my colleague Andy Obermueller has identified one that could be an exception. Back in August of last year, Andy highlighted a little-known company called Amplify (NYSE: BETR), an Austin, Texas-based snack food company. Amplify’s best-selling product is Skinny Pop, a healthy form of popcorn. But it also makes a host of other health-conscious foods for consumers. When Andy originally wrote about Amplify, he issued an immediate “buy” recommendation on the stock, which had recently gone public. Andy recently confessed to his Game-Changing Stocks readers that his timing was perhaps a little bit off, but anyone who followed his recommendation is still sitting on a nice gain:       “Looking back, I can see — and feel obligated to confess — that I made an error in my timing. As with many IPOs, the market created future entry points far more attractive than the pricing available at the time of my recommendation. I erred further in failing… Read More

When discussing consumerism from a socio-economic standpoint, the term “upward mobility” is always used. When consumers move up in economic class, money moves with them. I’ve discussed the rise of the emerging market middle class in previous articles. One product/service that had trouble gaining traction among the new middle class is consumer banking. Financial institutions like Citigroup (NYSE: C) and JP Morgan Chase (NYSE: JPM) have established large institutional footprints in emerging markets in corporate banking, as well wealth management services for the emerging market rich. #-ad_banner-#However, unlike in the United States where there is a brick and mortar bank… Read More

When discussing consumerism from a socio-economic standpoint, the term “upward mobility” is always used. When consumers move up in economic class, money moves with them. I’ve discussed the rise of the emerging market middle class in previous articles. One product/service that had trouble gaining traction among the new middle class is consumer banking. Financial institutions like Citigroup (NYSE: C) and JP Morgan Chase (NYSE: JPM) have established large institutional footprints in emerging markets in corporate banking, as well wealth management services for the emerging market rich. #-ad_banner-#However, unlike in the United States where there is a brick and mortar bank on every single corner, brick and mortar banking has not grown in emerging markets. But money still needs to move and consumers will find other ways to do it besides a traditional bank. Enter Western Union (NYSE: WU). Spun off from First Data Corp (NYSE: FDC) in 2006, Western Union is recognized as one of the nation’s largest independent providers of consumer money transfer services. Nearly 80% of the company’s revenues come from consumer to consumer services such as its branded Western Union Money Gram product, pre-paid debit cards, and money orders. In the United States, these services are distributed… Read More