This past week, two highly-respected investment publications opined that this stock is a top turnaround play. Barron’s touted that there is “hope, at last” in this name, even though its stock has fallen by more than 50% in the past decade to trail the S&P 500 and a number of archrivals badly. In this same period, the market is about flat, while rivals have returned between 75% and 150%. The Financial Times offered an analysis that was a bit more skeptical, but still concluded the CEO is making a big bet… Read More

This past week, two highly-respected investment publications opined that this stock is a top turnaround play. Barron’s touted that there is “hope, at last” in this name, even though its stock has fallen by more than 50% in the past decade to trail the S&P 500 and a number of archrivals badly. In this same period, the market is about flat, while rivals have returned between 75% and 150%. The Financial Times offered an analysis that was a bit more skeptical, but still concluded the CEO is making a big bet on “fresh growth” that relies on beefing up sales to emerging markets, reemphasizing key divisions that focus on infrastructure, and returning to research and development to drive innovation in the coming decade. Those statements are all well and good, but the historical numbers show that General Electric (NYSE: GE) has lost its way and needs a turnaround to return to the growth heyday it experienced while under the fearless leadership of Jack Welch. The truth is that current CEO Jeff Immelt has had an uphill battle since taking the helm in 2001, as Welch saddled… Read More

Many investors tend to focus on how a stock will fare in coming weeks and months. Company executives have a very different task. They need to stay focused on a much bigger picture, building a business that can grow for years to come. If investors push a stock down due to near-term issues, then executives have a clear move to make: Buy company shares while they’re not fully appreciated. Here are two stocks that have been pursued by insiders in recent weeks. Later on, I’ll give my take on whether or not they are compelling “buys”… Read More

Many investors tend to focus on how a stock will fare in coming weeks and months. Company executives have a very different task. They need to stay focused on a much bigger picture, building a business that can grow for years to come. If investors push a stock down due to near-term issues, then executives have a clear move to make: Buy company shares while they’re not fully appreciated. Here are two stocks that have been pursued by insiders in recent weeks. Later on, I’ll give my take on whether or not they are compelling “buys” right now… Rentrak (Nasdaq: RENT) When information and media-measuring firm Nielsen Holdings (Nasdaq: NLSN) pulled off an initial public offering (IPO) in January, many institutional investors gave the $10 billion (in market value) company a fresh look. But they may be wiser to give industry upstart Rentrak their attention instead. This $300 million company is slowly stealing business away from Nielsen and some analysts think the company can be an earnings powerhouse in a few years. If you came… Read More

From employment trends to factory production levels to trade figures, all signs are pointing to an improving U.S. economy. And in the early stages of any economic rebound, investors always flock to stocks with small market capitalizations. Back in 1990, when the economy was about to break out of its shell, the Russell 2000 Index, which focuses on small cap stocks, rose 100% during the next 36 months. These days, these small caps are back in vogue again. The Russell 2000 has risen… Read More

From employment trends to factory production levels to trade figures, all signs are pointing to an improving U.S. economy. And in the early stages of any economic rebound, investors always flock to stocks with small market capitalizations. Back in 1990, when the economy was about to break out of its shell, the Russell 2000 Index, which focuses on small cap stocks, rose 100% during the next 36 months. These days, these small caps are back in vogue again. The Russell 2000 has risen for seven of the last eight months. The index is now within just a few points of all-time highs hit back in 2007. Unlike blue chip stocks found in the S&P 500, smaller company stocks in the Russell 2000 tend to be much more volatile. Of course, that means even bigger gains in rising markets for some names. Right now, I’m taking a closer look at the hottest small caps, those Russell 2000 components that rose more than 50% in March. These sharp moves may be a harbinger of even better days ahead, or… Read More

By some estimates, the sum total of gold mined from the time of the ancient Egyptians through today would fit neatly into a 25-meter cube. That makes it pretty scarce. But for every 10 ounces of gold dug up from the ground, miners extract less than 1 ounce of platinum. And these precious metals are downright plentiful compared to promethium, a trace element that comprises just four parts per quintillion in naturally occurring ores. The entire global supply is thought to be a mere 500 grams — about the weight of a football. Read More

By some estimates, the sum total of gold mined from the time of the ancient Egyptians through today would fit neatly into a 25-meter cube. That makes it pretty scarce. But for every 10 ounces of gold dug up from the ground, miners extract less than 1 ounce of platinum. And these precious metals are downright plentiful compared to promethium, a trace element that comprises just four parts per quintillion in naturally occurring ores. The entire global supply is thought to be a mere 500 grams — about the weight of a football. Promethium is the rarest of the “rare earth metals,” a series of 17 obscure elements with unusual properties and valuable commercial applications. These metals aren’t exactly household names just yet. You might not even be able to pronounce ytterbium, let alone know what it’s used for. But if the combination of tight supplies and booming global demand intrigues you, then you’ll want to take a few minutes to familiarize yourself with this group. Because even after posting red-hot gains of 100% or more during the past year, stocks in this sector still have untold upside… Read More

The stock market continues to rack up nice gains. The S&P 500 rose 5.4% in the first quarter (after rising roughly 10% in each of the prior two quarters). If you’re keeping score, that first quarter gain was the best for the S&P 500 since 1998. Yet some stocks are missing out on all the fun. I’ve come across more than a dozen stocks in the S&P 500 that actually fell by 15% — or more — in the first quarter. These companies have suffered their own self-inflicted wounds, but in some cases, they are already on… Read More

The stock market continues to rack up nice gains. The S&P 500 rose 5.4% in the first quarter (after rising roughly 10% in each of the prior two quarters). If you’re keeping score, that first quarter gain was the best for the S&P 500 since 1998. Yet some stocks are missing out on all the fun. I’ve come across more than a dozen stocks in the S&P 500 that actually fell by 15% — or more — in the first quarter. These companies have suffered their own self-inflicted wounds, but in some cases, they are already on the mend. Let’s take a look at which ones are most likely to bounce back in the second quarter and beyond.   The fact that consumer-focused stocks such as RadioShack (NYSE: RSH), Urban Outfitters (Nasdaq: URBN), Target (NYSE: TGT), Best Buy (NYSE: BBY) and Carnival (NYSE: CCL) are likely to fare so poorly at a time of improving employment numbers is a bit curious. But if you dig a little deeper, you can start to see why. For example, Urban Outfitters delivered weak results for the all-important January quarter, and… Read More

Back in August 2009, the International Monetary Fund (IMF) released a report stating that a global economic recovery had begun to finally take hold following the credit crisis. Since that time, global economies have continued to recover and stock markets across the world have… Read More

Analysts love to grab headlines. And to do this, they often resort to their favorite ploy: The super-sized price target. So when analysts at Morgan Stanley predicted that GM (NYSE: GM) might eventually soar to $100, I and others sat up and took notice. Morgan Stanley’s analysts predicted that shares would start to build higher right away on the heels of yet-to-be-released fourth quarter results. To be fair, their $100 target was predicated on results several years into the future. But so far, this bold prediction looks like a dud. The stock is off 18%… Read More

Analysts love to grab headlines. And to do this, they often resort to their favorite ploy: The super-sized price target. So when analysts at Morgan Stanley predicted that GM (NYSE: GM) might eventually soar to $100, I and others sat up and took notice. Morgan Stanley’s analysts predicted that shares would start to build higher right away on the heels of yet-to-be-released fourth quarter results. To be fair, their $100 target was predicated on results several years into the future. But so far, this bold prediction looks like a dud. The stock is off 18% since we looked at this investment thesis, trading right around its 52-week low. Were the analysts flat wrong? Or were they simply premature? Let’s take a look…   In hindsight, the analysts overlooked one major point of concern: rising oil prices. GM, along with Ford (NYSE: F), remains highly dependent on pick-up trucks and SUVs for the bulk of profits. Generally speaking, the bigger the vehicle, the fatter the profit margin. Crisis in the Middle East has helped fuel an oil price spike, leading many to conclude that truck sales, which had… Read More

So far this year, there have been 28 initial public offerings (IPOs). Of these, seven are already up at least 20%. In fact, one IPO — Chinese Internet company Qihoo 360 (NYSE: QIHU) — surged 100%. The problem is that you probably weren’t able to get in on any of them. The reason is that IPOs are hot commodities on Wall Street and go to top clients such as wealthy investors and institutions. However, there is actually a clever way to participate in the upside. How? By investing in the top private equity… Read More

So far this year, there have been 28 initial public offerings (IPOs). Of these, seven are already up at least 20%. In fact, one IPO — Chinese Internet company Qihoo 360 (NYSE: QIHU) — surged 100%. The problem is that you probably weren’t able to get in on any of them. The reason is that IPOs are hot commodities on Wall Street and go to top clients such as wealthy investors and institutions. However, there is actually a clever way to participate in the upside. How? By investing in the top private equity firms that help bring many of these companies public. Essentially, private equity shops look for companies with strong cash flow and substantial barriers to entry. They will use lots of debt to buy the companies — hopefully at low valuations. A few years later, the private equity firms will take these companies public and often reap big returns. Take a look at the largest hospital operator in the United States, HCA (NYSE: HCA), which pulled off a $3.79 billion IPO in early March. The private equity backers behind the deal made a return of more than 250% from when… Read More

#-ad_banner-#So far in 2011, technology is among the worst-performing industries in the market. The stock market, as measured by the S&P 500, ended the first quarter up nearly 6%, while tech returned just over 3%. Additionally, the average price-to-earnings (P/E) ratio for the stock market is around 14, while many leading tech companies trade well below this level — some even trade with single-digit earnings multiples. With weak near-term performance and low valuations, I see a contrarian buying opportunity. By the… Read More

#-ad_banner-#So far in 2011, technology is among the worst-performing industries in the market. The stock market, as measured by the S&P 500, ended the first quarter up nearly 6%, while tech returned just over 3%. Additionally, the average price-to-earnings (P/E) ratio for the stock market is around 14, while many leading tech companies trade well below this level — some even trade with single-digit earnings multiples. With weak near-term performance and low valuations, I see a contrarian buying opportunity. By the P/E metric alone, the tech sector is cheap. However, tech may be even cheaper than you think. This is because many of the leading players in the industry have managed to sock away billions of dollars in excess cash not needed to run daily operations. From a valuation perspective, it has become necessary to back out these net cash positions to focus solely on the underlying operations. Below is a table detailing share price and fundamental data for five of the largest tech companies out there.  As you can see, the stated P/E ratios, which are simply… Read More

For private equity (PE) firms, 2011 is the year of goldilocks — everything’s just right. Interest rates are low, the increasingly stable economy is pumping up corporate cash flows, and if you look hard enough, real bargains can be had. #-ad_banner-#The key for PE firms (also known as leveraged buyout shops) is to find companies that throw off lots of cash flow and also come with very healthy balance sheets. That way, a company can be acquired with its own cash and new loans, putting the buyout firms… Read More

For private equity (PE) firms, 2011 is the year of goldilocks — everything’s just right. Interest rates are low, the increasingly stable economy is pumping up corporate cash flows, and if you look hard enough, real bargains can be had. #-ad_banner-#The key for PE firms (also known as leveraged buyout shops) is to find companies that throw off lots of cash flow and also come with very healthy balance sheets. That way, a company can be acquired with its own cash and new loans, putting the buyout firms on the hook for only a moderate amount of upfront cash. Ideally, they look to take these companies public again a few years later (though with much weaker balance sheets by then). That’s what has happened to the likes of Hertz (NYSE: HTZ), hospital chain HCA (NYSE: HCA) and Burger King. A little sleuthing has revealed a list of companies that may now be in focus for a major deal in 2011. These companies are big enough (with a market value above $750 million) but not too big (with a… Read More