Even in the beaten down commodities sector, you can find stocks with clear upside catalysts. Case in point: shares of metals miner Glencore surged more than 10% last week (on the London Stock Exchange) on news that the firm planned to  suspend operations at a pair of African copper mines, issue new shares, cut its dividend and sell assets in an attempt to  preserve cash and cash flow. The move is seen as an inflection point for the industry and similar steps may soon be taken by other commodities producers. Industry wide output cuts of various commodities could set the… Read More

Even in the beaten down commodities sector, you can find stocks with clear upside catalysts. Case in point: shares of metals miner Glencore surged more than 10% last week (on the London Stock Exchange) on news that the firm planned to  suspend operations at a pair of African copper mines, issue new shares, cut its dividend and sell assets in an attempt to  preserve cash and cash flow. The move is seen as an inflection point for the industry and similar steps may soon be taken by other commodities producers. Industry wide output cuts of various commodities could set the stage for supply and demand to come back into equilibrium, which would boost pricing. Copper, in particular, may be subject to a brightening pricing picture. Are Commodities About To Head Higher? Of course, demand from China remains as the clearest headwind for commodity producers. Chinese imports of raw and finished goods have now fallen for 10 straight months, which has led to speculation of further policy easing by the Chinese government. Zhou Xiaochuan, governor of China’s central bank, told the G20 finance ministers earlier this month that the recent correction in stock prices is nearly over. Remarks like these… Read More

This week, investors all over the world are waiting to hear if the Federal Reserve will vote to increase interest rates… The mere anticipation of rising rates has been unnerving investors over the past few months. Many investors are selling pre-emptively because the conventional wisdom says higher rates are bad for stocks. But there’s an exception to every rule. Indeed, several areas of the financial sector would love substantially higher interest rates, including the insurance industry. #-ad_banner-#That’s because insurers invest policy premiums mainly in bonds and other rate-sensitive fixed-income securities. They are able to profit from the spread between portfolio… Read More

This week, investors all over the world are waiting to hear if the Federal Reserve will vote to increase interest rates… The mere anticipation of rising rates has been unnerving investors over the past few months. Many investors are selling pre-emptively because the conventional wisdom says higher rates are bad for stocks. But there’s an exception to every rule. Indeed, several areas of the financial sector would love substantially higher interest rates, including the insurance industry. #-ad_banner-#That’s because insurers invest policy premiums mainly in bonds and other rate-sensitive fixed-income securities. They are able to profit from the spread between portfolio returns and insurance policy claims payments. The spread, or net interest margin, widens when interest rates climb and shrinks when rates decline. Before the financial crisis, insurers typically generated roughly 3% net interest margins, but thanks to more than six years of rate-squelching easy monetary policy, net interest margins have since plummeted to around 1%. The result: a progressively tighter squeeze on overall profit growth for insurers. However, with many insurers are now trading at low earnings multiples — often for less than book value. In general, cash flow is strong, dividends are rising and balance sheets are solid. So… Read More

If you’ve been watching late night television, you’ve surely come across many infomercials that tout the promise of real estate riches. Six-figure incomes are promised — on just one single-family home — with  the use of massive amounts of leverage. To hear the pitchmen, you can simply have the renters pay off the mortgage. It’s a persuasive argument, but one that falls apart in action. #-ad_banner-#My own experience buying single-family (SFR) houses started in 2002, and by 2006 I owned as many as six homes. I still own a few rentals after selling most just before the housing bubble burst,… Read More

If you’ve been watching late night television, you’ve surely come across many infomercials that tout the promise of real estate riches. Six-figure incomes are promised — on just one single-family home — with  the use of massive amounts of leverage. To hear the pitchmen, you can simply have the renters pay off the mortgage. It’s a persuasive argument, but one that falls apart in action. #-ad_banner-#My own experience buying single-family (SFR) houses started in 2002, and by 2006 I owned as many as six homes. I still own a few rentals after selling most just before the housing bubble burst, but in my experience, I found that real estate is far from passive income. Calls come in at all hours for repairs and the bookkeeping can be a part-time job itself. I now prefer a simpler way to invest in real estate:  real estate investment trusts (REITs). Until just a few years ago, REITs exclusively focused on commercial property. In 2013, new REITs were launched that focused on single-family properties. I’ve found one REIT in particular could be a perfect substitute for managing your own portfolio of houses. A Great Time To Get Your Start In This Popular Investment… Read More

It’s true that a swing-for-the-fences approach is a very risky way to invest. When you find such golden opportunities, you should always make a modest investment. Any stocks with potentially robust upside usually often possess a lot of downside risk as well. Yet there are ways to mitigate risk when pursuing stocks with high upside. If they already sport low valuations, or if they have very strong balance sheets, they likely have limited downside. In effect, such stocks already reflect ample negative sentiment, and with a few helpful catalysts, can quickly move back into favor. #-ad_banner-#Every year, I like to… Read More

It’s true that a swing-for-the-fences approach is a very risky way to invest. When you find such golden opportunities, you should always make a modest investment. Any stocks with potentially robust upside usually often possess a lot of downside risk as well. Yet there are ways to mitigate risk when pursuing stocks with high upside. If they already sport low valuations, or if they have very strong balance sheets, they likely have limited downside. In effect, such stocks already reflect ample negative sentiment, and with a few helpful catalysts, can quickly move back into favor. #-ad_banner-#Every year, I like to focus on a basket of three stocks with triple-digit upside potential. I am glad to say that my track record with this approach over the years has been fairly solid. When I took this approach last September, I found three stocks that have largely delivered on my expectations: Lionbridge Technologies (Nasdaq: LIOX) has risen 14%, Novavax (Nasdaq: NVAX) has gained 147% and Merge Healthcare (Nasdaq: MRGE), thanks to a buyout offer from IBM (NYSE: IBM), is up 222%. If you owned these three stocks as a group, you’d be sitting on a 128% return — in less than a year. Read More

Market volatility: it can either be feared or embraced. Shrewd investors know that the market’s wild swings are an opportunity to buy shares of good companies that have been oversold. In the last two weeks since reporting its third quarter earnings, The Walt Disney Company (NYSE: DIS) has fallen nearly 20%. #-ad_banner-# The sell-off comes despite the fact that quarterly results were quite robust. Each of Disney’s four main divisions posted strong revenue and operating earnings growth, which led to record per share profits of $1.45, three cents ahead of estimates. Simply put, this pullback is a terrific opportunity for… Read More

Market volatility: it can either be feared or embraced. Shrewd investors know that the market’s wild swings are an opportunity to buy shares of good companies that have been oversold. In the last two weeks since reporting its third quarter earnings, The Walt Disney Company (NYSE: DIS) has fallen nearly 20%. #-ad_banner-# The sell-off comes despite the fact that quarterly results were quite robust. Each of Disney’s four main divisions posted strong revenue and operating earnings growth, which led to record per share profits of $1.45, three cents ahead of estimates. Simply put, this pullback is a terrific opportunity for long-term investors to buy one of the most dominant companies in the world at a fantastic price.  Disney Has Already Demonstrated Impressive Rebound Skills After bottoming out during the recession, Disney’s financial rebound has been quite impressive. As you can see in the chart below, earnings have grown at a 19% annual pace over the past five years. Take a look: And although Disney is most famous for its movies and theme parks, the division that has the biggest overall impact on the company’s performance is the media networks division, which in 2014 contributed over… Read More

The last couple of weeks haven’t been kind to investors. The S&P 500 Index is down more than 9% since August 10 and every trading day has been filled with drama. What started as China’s central bank devaluing its currency — the yuan — has morphed into uncertainty about the strength of the global economy. And the one thing that the market hates is uncertainty. It’s not easy to make decisions and take action in a pessimistic and uncertain market. But it’s often the tough decisions that allow us to sleep better at night. Read More

The last couple of weeks haven’t been kind to investors. The S&P 500 Index is down more than 9% since August 10 and every trading day has been filled with drama. What started as China’s central bank devaluing its currency — the yuan — has morphed into uncertainty about the strength of the global economy. And the one thing that the market hates is uncertainty. It’s not easy to make decisions and take action in a pessimistic and uncertain market. But it’s often the tough decisions that allow us to sleep better at night. Here are some of the things I focus on in times like this… Evaluate Your Cash Balance As investors, we have been made to feel guilty about holding cash. It’s as if we’re shirking our responsibilities. We feel like we should always have our entire portfolio working for us. But cash does work for us. Cash holds up pretty darn well in a downturn. Cash helps us sleep better at night, no matter what the market throws at us. Cash allows us to buy shares of great companies during a downturn, without having… Read More

Officers and directors at companies (known as “insiders”) tend to receive lavish pay packages, and rarely deserve much pity. But the past few weeks have been downright miserable for them. Those insiders that acquired shares on the open market during the recent post-earnings season window have lost tons of money. If they had just waited a few weeks longer, they could have bought a lot more shares with the same amount of funds. Well, their loss is our gain. We can now buy shares of companies where insiders only recently paid much higher prices. I looked at… Read More

Officers and directors at companies (known as “insiders”) tend to receive lavish pay packages, and rarely deserve much pity. But the past few weeks have been downright miserable for them. Those insiders that acquired shares on the open market during the recent post-earnings season window have lost tons of money. If they had just waited a few weeks longer, they could have bought a lot more shares with the same amount of funds. Well, their loss is our gain. We can now buy shares of companies where insiders only recently paid much higher prices. I looked at dozens of such examples, and found five that stand out for especially strong appeal. (All insider data supplied by InsiderInsights.com). #-ad_banner-#1. Abercrombie & Fitch (NYSE: ANF) Back in June, a cluster of three insiders acquired $1.5 million in stock, at an average price of $22.30 a share. They may have been attracted to the fact that shares traded above $40 last summer. But they acted too soon, as shares have since plunged to just $17 in this market rout. This youth-focused retailer has been struggling for growth in recent quarters. But an improving employment picture, especially for… Read More

As a trader, I usually look for companies that are home-run hitters in terms of earnings growth. But with great reward comes greater risk, and such companies can also strike out. In a panicky market like the current one, an earnings whiff can lead to a big drop in the stock’s price. At times like these, it can be better to go for the reliable company that consistently hits singles and doubles. Software company Synopsys (Nasdaq: SNPS) is just such a stock. It’s not flashy, but it is likely to move steadily higher, making it a great bet in uncertain… Read More

As a trader, I usually look for companies that are home-run hitters in terms of earnings growth. But with great reward comes greater risk, and such companies can also strike out. In a panicky market like the current one, an earnings whiff can lead to a big drop in the stock’s price. At times like these, it can be better to go for the reliable company that consistently hits singles and doubles. Software company Synopsys (Nasdaq: SNPS) is just such a stock. It’s not flashy, but it is likely to move steadily higher, making it a great bet in uncertain times. Synopsys has grown earning per share (EPS) at an average rate of nearly 13% a year for past five years. During that time, shares have steadily advanced, more than doubling in price. #-ad_banner-# Founded in 1986, Synopsys is currently the world’s 15th largest software company. It’s a world leader in electronic design automation software, which is used to design and analyze electronic systems such as printed circuit boards and integrated circuits, and semiconductor IP. It is also a leader in software quality and security testing. Its customers include manufacturers of advanced system on chip… Read More

While the economy currently appears to be on firm footing, investors should always be prepared for the next, inevitable recession.  Indeed it’s wise to have some portfolio exposure to companies that can actually thrive during downturns. #-ad_banner-#Case in point: Dorman Products (Nasdaq: DORM), a leading supplier of replacement automotive parts. The company’s counter-cyclical business model enables it to weather recessions better than most companies.  Why should you consider such a stock right now? Although sales of new cars and trucks are currently quite strong, history suggests that such momentum won’t last.  In nearly every recession going back to 1980, sales of vehicles have dropped sharply from cyclical… Read More

While the economy currently appears to be on firm footing, investors should always be prepared for the next, inevitable recession.  Indeed it’s wise to have some portfolio exposure to companies that can actually thrive during downturns. #-ad_banner-#Case in point: Dorman Products (Nasdaq: DORM), a leading supplier of replacement automotive parts. The company’s counter-cyclical business model enables it to weather recessions better than most companies.  Why should you consider such a stock right now? Although sales of new cars and trucks are currently quite strong, history suggests that such momentum won’t last.  In nearly every recession going back to 1980, sales of vehicles have dropped sharply from cyclical peaks. When a recession hits, consumers tend to repair rather than replace their aging cars and trucks. Dorman’s strength throughout all phases of the business cycle is perfectly illustrated in its consistent sales growth. The company managed to increase sales, even during the economic downturn of 2008 and 2009.  According to the Institute for Highway Safety, the average age of all cars on the road is still a record 11.5 years and is expected to stay in near there for the next several years. The relatively high age of the current national fleet suggests that demand for auto parts… Read More

In 1991, Steve Young became the starting quarterback for the San Francisco 49ers, one of the National Football League’s most storied franchises. Young was a highly touted prospect, but he was facing an obstacle none of his peers had to overcome. He was replacing Joe Montana — one of the greatest quarterbacks of all time. #-ad_banner-#Montana had won four Super Bowls with the 49ers and would soon be inducted into the Pro Football Hall of Fame. While 49ers fans were optimistic about their new, quarterback, they knew he’d never be nearly as successful as… Read More

In 1991, Steve Young became the starting quarterback for the San Francisco 49ers, one of the National Football League’s most storied franchises. Young was a highly touted prospect, but he was facing an obstacle none of his peers had to overcome. He was replacing Joe Montana — one of the greatest quarterbacks of all time. #-ad_banner-#Montana had won four Super Bowls with the 49ers and would soon be inducted into the Pro Football Hall of Fame. While 49ers fans were optimistic about their new, quarterback, they knew he’d never be nearly as successful as Joe Montana. They couldn’t have been more wrong. Steve Young won the league’s Most Valuable Player award in both the 1992 and 1994 seasons, and he led the 49ers to a decisive Super Bowl victory in 1995. Despite replacing an all-time great, Young had exceeded expectations. Today, Apple finds itself in a position similar to the 1991 San Francisco 49ers. Steve Jobs was an icon and incredible innovator, and there are a lot of people who think Apple won’t be able to continue innovating without its founder. That’s… Read More